Correlation Between Pet Acquisition and Groupon
Can any of the company-specific risk be diversified away by investing in both Pet Acquisition and Groupon at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Pet Acquisition and Groupon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pet Acquisition LLC and Groupon, you can compare the effects of market volatilities on Pet Acquisition and Groupon and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Pet Acquisition with a short position of Groupon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pet Acquisition and Groupon.
Diversification Opportunities for Pet Acquisition and Groupon
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pet and Groupon is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Pet Acquisition LLC and Groupon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupon and Pet Acquisition is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Pet Acquisition LLC are associated (or correlated) with Groupon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupon has no effect on the direction of Pet Acquisition i.e., Pet Acquisition and Groupon go up and down completely randomly.
Pair Corralation between Pet Acquisition and Groupon
Given the investment horizon of 90 days Pet Acquisition LLC is expected to under-perform the Groupon. In addition to that, Pet Acquisition is 1.2 times more volatile than Groupon. It trades about -0.3 of its total potential returns per unit of risk. Groupon is currently generating about 0.35 per unit of volatility. If you would invest 1,065 in Groupon on November 18, 2024 and sell it today you would earn a total of 218.00 from holding Groupon or generate 20.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pet Acquisition LLC vs. Groupon
Performance |
| Timeline |
| Pet Acquisition LLC |
| Groupon |
Pet Acquisition and Groupon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pet Acquisition and Groupon
The main advantage of trading using opposite Pet Acquisition and Groupon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pet Acquisition position performs unexpectedly, Groupon can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Groupon will offset losses from the drop in Groupon's long position.| Pet Acquisition vs. RH | Pet Acquisition vs. Dicks Sporting Goods | Pet Acquisition vs. Best Buy Co | Pet Acquisition vs. AutoZone |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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