Two Equities Correlation Analysis
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SBH
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This model provides you with a quick lookup of cross correlation between two equities. Please specify two instruments to run the correlation.
Diversification Opportunities for Sally Beauty and NYSE Composite
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sally and NYSE is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Sally Beauty Holdings and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite and Sally Beauty 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 Sally Beauty Holdings are associated (or correlated) with NYSE Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE Composite has no effect on the direction of Sally Beauty i.e., Sally Beauty and NYSE Composite go up and down completely randomly.
Pair Corralation between Sally Beauty and NYSE Composite
Considering the 90-day investment horizon Sally Beauty Holdings is expected to under-perform the NYSE Composite. In addition to that, Sally Beauty is 4.62 times more volatile than NYSE Composite. It trades about -0.22 of its total potential returns per unit of risk. NYSE Composite is currently generating about -0.23 per unit of volatility. If you would invest 1,797,579 in NYSE Composite on January 19, 2024 and sell it today you would lose (57,235) from holding NYSE Composite or give up 3.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sally Beauty Holdings vs. NYSE Composite
Performance |
| Timeline |
Sally Beauty and NYSE Composite Volatility Contrast
Predicted Return Density |
| Returns |
Sally Beauty Holdings
Pair trading matchups for Sally Beauty
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with Sally Beauty and NYSE Composite
The main advantage of trading using opposite Sally Beauty and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sally Beauty position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position.The idea behind Sally Beauty Holdings and NYSE Composite pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| NYSE Composite vs. Western Digital | NYSE Composite vs. Meta Data | NYSE Composite vs. Transphorm Technology | NYSE Composite vs. Playtika Holding 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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