Correlation Between Spectrum Brands and Rite Aid
Can any of the company-specific risk be diversified away by investing in both Spectrum Brands and Rite Aid 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 Spectrum Brands and Rite Aid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spectrum Brands Holdings and Rite Aid, you can compare the effects of market volatilities on Spectrum Brands and Rite Aid 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 Spectrum Brands with a short position of Rite Aid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spectrum Brands and Rite Aid.
Diversification Opportunities for Spectrum Brands and Rite Aid
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Spectrum and Rite is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Spectrum Brands Holdings and Rite Aid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rite Aid and Spectrum Brands 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 Spectrum Brands Holdings are associated (or correlated) with Rite Aid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rite Aid has no effect on the direction of Spectrum Brands i.e., Spectrum Brands and Rite Aid go up and down completely randomly.
Pair Corralation between Spectrum Brands and Rite Aid
If you would invest 17.00 in Rite Aid on January 21, 2024 and sell it today you would earn a total of 0.00 from holding Rite Aid or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 4.55% |
Values | Daily Returns |
Spectrum Brands Holdings vs. Rite Aid
Performance |
Timeline |
Spectrum Brands Holdings |
Rite Aid |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Spectrum Brands and Rite Aid Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Spectrum Brands and Rite Aid
The main advantage of trading using opposite Spectrum Brands and Rite Aid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spectrum Brands position performs unexpectedly, Rite Aid 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 Rite Aid will offset losses from the drop in Rite Aid's long position.Spectrum Brands vs. Unilever PLC ADR | Spectrum Brands vs. Estee Lauder Companies | Spectrum Brands vs. ELF Beauty | Spectrum Brands vs. Coty Inc |
Rite Aid vs. PetMed Express | Rite Aid vs. High Tide | Rite Aid vs. China Jo Jo Drugstores | Rite Aid vs. Bimi International Medical |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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