This module allows you to analyze existing cross correlation between Alphabet and Best Buy Co. You can compare the effects of market volatilities on Alphabet 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 Alphabet with a short position of Best Buy. See also your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and Best Buy.
Given the investment horizon of 30 days, Alphabet is expected to under-perform the Best Buy. In addition to that, Alphabet is 1.54 times more volatile than Best Buy Co. It trades about -0.01 of its total potential returns per unit of risk. Best Buy Co is currently generating about 0.37 per unit of volatility. If you would invest 7,230 in Best Buy Co on April 20, 2018 and sell it today you would earn a total of 595.00 from holding Best Buy Co or generate 8.23% return on investment over 30 days.
Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc and Best Buy Co Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Best Buy Co and Alphabet 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 Alphabet 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 Co has no effect on the direction of Alphabet i.e. Alphabet and Best Buy go up and down completely randomly.
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