Correlation Between Ffbw and Best Buy
Can any of the company-specific risk be diversified away by investing in both Ffbw and Best Buy 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 Ffbw and Best Buy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ffbw Inc and Best Buy Co, you can compare the effects of market volatilities on Ffbw and Best Buy 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 Ffbw with a short position of Best Buy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ffbw and Best Buy.
Diversification Opportunities for Ffbw and Best Buy
Poor diversification
The 3 months correlation between Ffbw and Best is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Ffbw Inc and Best Buy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Best Buy and Ffbw 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 Ffbw Inc are associated (or correlated) with Best Buy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Best Buy has no effect on the direction of Ffbw i.e., Ffbw and Best Buy go up and down completely randomly.
Pair Corralation between Ffbw and Best Buy
Given the investment horizon of 90 days Ffbw Inc is expected to generate 0.49 times more return on investment than Best Buy. However, Ffbw Inc is 2.04 times less risky than Best Buy. It trades about 0.01 of its potential returns per unit of risk. Best Buy Co is currently generating about 0.0 per unit of risk. If you would invest 1,162 in Ffbw Inc on January 26, 2024 and sell it today you would earn a total of 16.00 from holding Ffbw Inc or generate 1.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 39.47% |
| Values | Daily Returns |
Ffbw Inc vs. Best Buy Co
Performance |
| Timeline |
| Ffbw Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Best Buy |
Ffbw and Best Buy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ffbw and Best Buy
The main advantage of trading using opposite Ffbw and Best Buy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ffbw position performs unexpectedly, Best Buy 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 Best Buy will offset losses from the drop in Best Buy's long position.| Ffbw vs. Nmb Financial Corp | Ffbw vs. Hang Seng Bank | Ffbw vs. Southern BancShares NC | Ffbw vs. CCSB Financial 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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