Correlation Between Warby Parker and AptarGroup
Can any of the company-specific risk be diversified away by investing in both Warby Parker and AptarGroup 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 Warby Parker and AptarGroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Warby Parker and AptarGroup, you can compare the effects of market volatilities on Warby Parker and AptarGroup 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 Warby Parker with a short position of AptarGroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Warby Parker and AptarGroup.
Diversification Opportunities for Warby Parker and AptarGroup
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Warby and AptarGroup is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Warby Parker and AptarGroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AptarGroup and Warby Parker 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 Warby Parker are associated (or correlated) with AptarGroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AptarGroup has no effect on the direction of Warby Parker i.e., Warby Parker and AptarGroup go up and down completely randomly.
Pair Corralation between Warby Parker and AptarGroup
Given the investment horizon of 90 days Warby Parker is expected to generate 1.8 times more return on investment than AptarGroup. However, Warby Parker is 1.8 times more volatile than AptarGroup. It trades about 0.6 of its potential returns per unit of risk. AptarGroup is currently generating about 0.06 per unit of risk. If you would invest 1,743 in Warby Parker on August 24, 2024 and sell it today you would earn a total of 584.00 from holding Warby Parker or generate 33.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Warby Parker vs. AptarGroup
Performance |
| Timeline |
| Warby Parker |
| AptarGroup |
Warby Parker and AptarGroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Warby Parker and AptarGroup
The main advantage of trading using opposite Warby Parker and AptarGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Warby Parker position performs unexpectedly, AptarGroup 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 AptarGroup will offset losses from the drop in AptarGroup's long position.| Warby Parker vs. Alcon AG | Warby Parker vs. The Cooper Companies, | Warby Parker vs. AngioDynamics | Warby Parker vs. AptarGroup |
| AptarGroup vs. Haemonetics | AptarGroup vs. Merit Medical Systems | AptarGroup vs. AngioDynamics | AptarGroup vs. Envista Holdings Corp |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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