Correlation Between Acorn International and Advance Auto
Can any of the company-specific risk be diversified away by investing in both Acorn International and Advance Auto 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 Acorn International and Advance Auto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acorn International and Advance Auto Parts, you can compare the effects of market volatilities on Acorn International and Advance Auto 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 Acorn International with a short position of Advance Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acorn International and Advance Auto.
Diversification Opportunities for Acorn International and Advance Auto
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Acorn and Advance is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Acorn International and Advance Auto Parts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advance Auto Parts and Acorn International 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 Acorn International are associated (or correlated) with Advance Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advance Auto Parts has no effect on the direction of Acorn International i.e., Acorn International and Advance Auto go up and down completely randomly.
Pair Corralation between Acorn International and Advance Auto
If you would invest 6,642 in Advance Auto Parts on December 30, 2023 and sell it today you would earn a total of 1,867 from holding Advance Auto Parts or generate 28.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Acorn International vs. Advance Auto Parts
Performance |
Timeline |
Acorn International |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
Advance Auto Parts |
Acorn International and Advance Auto Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Acorn International and Advance Auto
The main advantage of trading using opposite Acorn International and Advance Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acorn International position performs unexpectedly, Advance Auto 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 Advance Auto will offset losses from the drop in Advance Auto's long position.Acorn International vs. SNDL Inc | Acorn International vs. Playa Hotels Resorts | Acorn International vs. Park Hotels Resorts | Acorn International vs. Kura Sushi USA |
Advance Auto vs. Hanover Foods | Advance Auto vs. SNDL Inc | Advance Auto vs. Bridgford Foods | Advance Auto vs. National Vision Holdings |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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