This module allows you to analyze existing cross correlation between Best Buy Co and Dollar Tree. You can compare the effects of market volatilities on Best Buy and Dollar Tree 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 Best Buy with a short position of Dollar Tree. See also your portfolio center. Please also check ongoing floating volatility patterns of Best Buy and Dollar Tree.
Considering 30-days investment horizon, Best Buy Co is expected to generate 1.43 times more return on investment than Dollar Tree. However, Best Buy is 1.43 times more volatile than Dollar Tree. It trades about 0.0 of its potential returns per unit of risk. Dollar Tree is currently generating about -0.03 per unit of risk. If you would invest 7,626 in Best Buy Co on June 22, 2018 and sell it today you would lose (15.00) from holding Best Buy Co or give up 0.2% of portfolio value over 30 days.
Overlapping area represents the amount of risk that can be diversified away by holding Best Buy Co Inc and Dollar Tree Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Dollar Tree and Best Buy 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 Best Buy Co are associated (or correlated) with Dollar Tree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dollar Tree has no effect on the direction of Best Buy i.e. Best Buy and Dollar Tree go up and down completely randomly.
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