Correlation Between YETI Holdings and Chewy
Can any of the company-specific risk be diversified away by investing in both YETI Holdings and Chewy 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 YETI Holdings and Chewy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YETI Holdings and Chewy Inc, you can compare the effects of market volatilities on YETI Holdings and Chewy 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 YETI Holdings with a short position of Chewy. Check out your portfolio center. Please also check ongoing floating volatility patterns of YETI Holdings and Chewy.
Diversification Opportunities for YETI Holdings and Chewy
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between YETI and Chewy is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding YETI Holdings and Chewy Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chewy Inc and YETI Holdings 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 YETI Holdings are associated (or correlated) with Chewy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chewy Inc has no effect on the direction of YETI Holdings i.e., YETI Holdings and Chewy go up and down completely randomly.
Pair Corralation between YETI Holdings and Chewy
Given the investment horizon of 90 days YETI Holdings is expected to under-perform the Chewy. But the stock apears to be less risky and, when comparing its historical volatility, YETI Holdings is 1.35 times less risky than Chewy. The stock trades about -0.02 of its potential returns per unit of risk. The Chewy Inc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,877 in Chewy Inc on November 9, 2024 and sell it today you would earn a total of 1,991 from holding Chewy Inc or generate 106.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
YETI Holdings vs. Chewy Inc
Performance |
| Timeline |
| YETI Holdings |
| Chewy Inc |
YETI Holdings and Chewy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YETI Holdings and Chewy
The main advantage of trading using opposite YETI Holdings and Chewy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YETI Holdings position performs unexpectedly, Chewy 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 Chewy will offset losses from the drop in Chewy's long position.| YETI Holdings vs. Acushnet Holdings Corp | YETI Holdings vs. Madison Square Garden | YETI Holdings vs. Callaway Golf | YETI Holdings vs. Johnson Outdoors |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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