Correlation Between Floor Decor and Camping World

Can any of the company-specific risk be diversified away by investing in both Floor Decor and Camping World 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 Floor Decor and Camping World into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Floor Decor Holdings and Camping World Holdings, you can compare the effects of market volatilities on Floor Decor and Camping World 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 Floor Decor with a short position of Camping World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Floor Decor and Camping World.

Diversification Opportunities for Floor Decor and Camping World

0.41

Correlation Coefficient

Floor Decor  Camping World

Very weak diversification

The 3 months correlation between Floor and Camping is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Floor Decor Holdings and Camping World Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camping World Holdings and Floor Decor 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 Floor Decor Holdings are associated (or correlated) with Camping World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camping World Holdings has no effect on the direction of Floor Decor i.e., Floor Decor and Camping World go up and down completely randomly.

Pair Corralation between Floor Decor and Camping World

Considering the 90-day investment horizon Floor Decor is expected to generate 1.07 times less return on investment than Camping World. But when comparing it to its historical volatility, Floor Decor Holdings is 1.52 times less risky than Camping World. It trades about 0.07 of its potential returns per unit of risk. Camping World Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,368  in Camping World Holdings on May 7, 2025 and sell it today you would earn a total of  116.00  from holding Camping World Holdings or generate 8.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Floor Decor Holdings  vs.  Camping World Holdings

Floor Decor Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Floor Decor Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Floor Decor exhibited solid returns over the last few months and may actually be approaching a breakup point.

Camping World Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Camping World Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile basic indicators, Camping World demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Floor Decor and Camping World

The main advantage of trading using opposite Floor Decor and Camping World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Floor Decor position performs unexpectedly, Camping World 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 Camping World will offset losses from the drop in Camping World's long position.

The idea behind Floor Decor Holdings and Camping World Holdings 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.

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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.