Correlation Between Investor and T.J. Maxx
Can any of the company-specific risk be diversified away by investing in both Investor and T.J. Maxx 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 Investor and T.J. Maxx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investor AB and The TJX Companies, you can compare the effects of market volatilities on Investor and T.J. Maxx 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 Investor with a short position of T.J. Maxx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investor and T.J. Maxx.
Diversification Opportunities for Investor and T.J. Maxx
Pay attention - limited upside
The 3 months correlation between Investor and T.J. is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Investor AB and The TJX Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TJX Companies and Investor 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 Investor AB are associated (or correlated) with T.J. Maxx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TJX Companies has no effect on the direction of Investor i.e., Investor and T.J. Maxx go up and down completely randomly.
Pair Corralation between Investor and T.J. Maxx
If you would invest 9,775 in The TJX Companies on February 11, 2024 and sell it today you would earn a total of 106.00 from holding The TJX Companies or generate 1.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Investor AB vs. The TJX Companies
Performance |
Timeline |
Investor AB |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
TJX Companies |
Investor and T.J. Maxx Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Investor and T.J. Maxx
The main advantage of trading using opposite Investor and T.J. Maxx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investor position performs unexpectedly, T.J. Maxx 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 T.J. Maxx will offset losses from the drop in T.J. Maxx's long position.Investor vs. CECO Environmental Corp | Investor vs. SFL Corporation | Investor vs. Universal Technical Institute | Investor vs. Inflection Point Acquisition |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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