Correlation Analysis Between Advance Auto and Best Buy

Analyzing existing cross correlation between Advance Auto Parts Inc Advance and Best Buy Co. You can compare the effects of market volatilities on Advance Auto 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 Advance Auto with a short position of Best Buy. See also your portfolio center. Please also check ongoing floating volatility patterns of Advance Auto and Best Buy.
Horizon     30 Days    Login   to change
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Comparative Performance

Advance Auto Parts  
00

Risk-Adjusted Performance

Over the last 30 days Advance Auto Parts Inc Advance has generated negative risk-adjusted returns adding no value to investors with long positions. Inspite latest weak performance, the Stock's forward-looking indicators remain unfluctuating and the recent disarray on Wall Street may also be a sign of long period gains for the corporate body insiders.
Best Buy  
1414

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Best Buy Co are ranked lower than 14 (%) of all global equities and portfolios over the last 30 days. Inspite fairly weak basic indicators, Best Buy showed solid returns over the last few months and may actually be approaching a breakup point.

Advance Auto and Best Buy Volatility Contrast

 Predicted Return Density 
    
  Returns 

Advance Auto Parts Inc Advance  vs.  Best Buy Co Inc

 Performance (%) 
    
  Timeline 

Pair Volatility

Considering 30-days investment horizon, Advance Auto Parts Inc Advance is expected to under-perform the Best Buy. But the stock apears to be less risky and, when comparing its historical volatility, Advance Auto Parts Inc Advance is 1.05 times less risky than Best Buy. The stock trades about -0.08 of its potential returns per unit of risk. The Best Buy Co is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  7,147  in Best Buy Co on December 18, 2019 and sell it today you would earn a total of  1,748  from holding Best Buy Co or generate 24.46% return on investment over 30 days.

Pair Corralation between Advance Auto and Best Buy

-0.62
Time Period3 Months [change]
DirectionNegative 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Diversification Opportunities for Advance Auto and Best Buy

Advance Auto Parts Inc Advance diversification synergy

Excellent diversification

Overlapping area represents the amount of risk that can be diversified away by holding Advance Auto Parts Inc Advance and Best Buy Co Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Best Buy and Advance Auto 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 Advance Auto Parts Inc Advance 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 Advance Auto i.e. Advance Auto and Best Buy go up and down completely randomly.
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