Correlation Between Turtle Beach and IRobot
Can any of the company-specific risk be diversified away by investing in both Turtle Beach and IRobot 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 Turtle Beach and IRobot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Turtle Beach Corp and iRobot, you can compare the effects of market volatilities on Turtle Beach and IRobot 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 Turtle Beach with a short position of IRobot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turtle Beach and IRobot.
Diversification Opportunities for Turtle Beach and IRobot
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Turtle and IRobot is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Turtle Beach Corp and iRobot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iRobot and Turtle Beach 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 Turtle Beach Corp are associated (or correlated) with IRobot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iRobot has no effect on the direction of Turtle Beach i.e., Turtle Beach and IRobot go up and down completely randomly.
Pair Corralation between Turtle Beach and IRobot
Given the investment horizon of 90 days Turtle Beach Corp is expected to generate 0.64 times more return on investment than IRobot. However, Turtle Beach Corp is 1.56 times less risky than IRobot. It trades about 0.14 of its potential returns per unit of risk. iRobot is currently generating about -0.17 per unit of risk. If you would invest 813.00 in Turtle Beach Corp on January 20, 2024 and sell it today you would earn a total of 675.00 from holding Turtle Beach Corp or generate 83.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Turtle Beach Corp vs. iRobot
Performance |
| Timeline |
| Turtle Beach Corp |
| iRobot |
Turtle Beach and IRobot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Turtle Beach and IRobot
The main advantage of trading using opposite Turtle Beach and IRobot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turtle Beach position performs unexpectedly, IRobot 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 IRobot will offset losses from the drop in IRobot's long position.| Turtle Beach vs. LG Display Co | Turtle Beach vs. The Singing Machine | Turtle Beach vs. Wearable Devices | Turtle Beach vs. Zepp Health Corp |
| IRobot vs. Meta Materials | IRobot vs. Sphere 3D Corp | IRobot vs. Katapult Holdings | IRobot vs. Aquagold International |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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