Two Equities Correlation Analysis
Specify exactly 2 symbols:
TGT
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This model provides you with a quick lookup of cross correlation between two equities. Please specify two instruments to run the correlation.
Diversification Opportunities for Target and NYSE Composite
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Target and NYSE is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Target and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite and Target 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 Target are associated (or correlated) with NYSE Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE Composite has no effect on the direction of Target i.e., Target and NYSE Composite go up and down completely randomly.
Pair Corralation between Target and NYSE Composite
Considering the 90-day investment horizon Target is expected to under-perform the NYSE Composite. In addition to that, Target is 1.57 times more volatile than NYSE Composite. It trades about -0.16 of its total potential returns per unit of risk. NYSE Composite is currently generating about -0.1 per unit of volatility. If you would invest 1,807,715 in NYSE Composite on January 25, 2024 and sell it today you would lose (28,439) from holding NYSE Composite or give up 1.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Target vs. NYSE Composite
Performance |
| Timeline |
Target and NYSE Composite Volatility Contrast
Predicted Return Density |
| Returns |
Target
Pair trading matchups for Target
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with Target and NYSE Composite
The main advantage of trading using opposite Target and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Target position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position.| Target vs. Costco Wholesale Corp | Target vs. BJs Wholesale Club | Target vs. Dollar Tree | Target vs. Dollar General |
| NYSE Composite vs. Aduro Clean Technologies | NYSE Composite vs. Transphorm Technology | NYSE Composite vs. Advanced Micro Devices | NYSE Composite vs. IPG Photonics |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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