Correlation Between Rite Aid and Spectrum Brands
Can any of the company-specific risk be diversified away by investing in both Rite Aid and Spectrum Brands 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 Rite Aid and Spectrum Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rite Aid and Spectrum Brands Holdings, you can compare the effects of market volatilities on Rite Aid and Spectrum Brands 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 Rite Aid with a short position of Spectrum Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rite Aid and Spectrum Brands.
Diversification Opportunities for Rite Aid and Spectrum Brands
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Rite and Spectrum is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Rite Aid and Spectrum Brands Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectrum Brands Holdings and Rite Aid 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 Rite Aid are associated (or correlated) with Spectrum Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectrum Brands Holdings has no effect on the direction of Rite Aid i.e., Rite Aid and Spectrum Brands go up and down completely randomly.
Pair Corralation between Rite Aid and Spectrum Brands
Considering the 90-day investment horizon Rite Aid is expected to under-perform the Spectrum Brands. In addition to that, Rite Aid is 3.33 times more volatile than Spectrum Brands Holdings. It trades about -0.05 of its total potential returns per unit of risk. Spectrum Brands Holdings is currently generating about 0.02 per unit of volatility. If you would invest 7,786 in Spectrum Brands Holdings on January 25, 2024 and sell it today you would earn a total of 265.00 from holding Spectrum Brands Holdings or generate 3.4% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 82.42% |
Values | Daily Returns |
Rite Aid vs. Spectrum Brands Holdings
Performance |
Timeline |
Rite Aid |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Spectrum Brands Holdings |
Rite Aid and Spectrum Brands Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Rite Aid and Spectrum Brands
The main advantage of trading using opposite Rite Aid and Spectrum Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rite Aid position performs unexpectedly, Spectrum Brands 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 Spectrum Brands will offset losses from the drop in Spectrum Brands' long position.Rite Aid vs. PetMed Express | Rite Aid vs. High Tide | Rite Aid vs. China Jo Jo Drugstores | Rite Aid vs. Bimi International Medical |
Spectrum Brands vs. European Wax Center | Spectrum Brands vs. Inter Parfums | Spectrum Brands vs. Mannatech Incorporated | Spectrum Brands vs. Nu Skin Enterprises |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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