Correlation Between IRobot and Turtle Beach
Can any of the company-specific risk be diversified away by investing in both IRobot and Turtle Beach 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 IRobot and Turtle Beach into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iRobot and Turtle Beach Corp, you can compare the effects of market volatilities on IRobot and Turtle Beach 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 IRobot with a short position of Turtle Beach. Check out your portfolio center. Please also check ongoing floating volatility patterns of IRobot and Turtle Beach.
Diversification Opportunities for IRobot and Turtle Beach
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IRobot and Turtle is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding iRobot and Turtle Beach Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turtle Beach Corp and IRobot 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 iRobot are associated (or correlated) with Turtle Beach. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turtle Beach Corp has no effect on the direction of IRobot i.e., IRobot and Turtle Beach go up and down completely randomly.
Pair Corralation between IRobot and Turtle Beach
Given the investment horizon of 90 days iRobot is expected to generate 3.54 times more return on investment than Turtle Beach. However, IRobot is 3.54 times more volatile than Turtle Beach Corp. It trades about -0.07 of its potential returns per unit of risk. Turtle Beach Corp is currently generating about -0.52 per unit of risk. If you would invest 782.00 in iRobot on January 26, 2024 and sell it today you would lose (98.00) from holding iRobot or give up 12.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iRobot vs. Turtle Beach Corp
Performance |
| Timeline |
| iRobot |
| Turtle Beach Corp |
IRobot and Turtle Beach Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IRobot and Turtle Beach
The main advantage of trading using opposite IRobot and Turtle Beach positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IRobot position performs unexpectedly, Turtle Beach 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 Turtle Beach will offset losses from the drop in Turtle Beach's long position.| IRobot vs. Tempur Sealy International | IRobot vs. La Z Boy Incorporated | IRobot vs. Purple Innovation | IRobot vs. MasterBrand |
| Turtle Beach vs. LG Display Co | Turtle Beach vs. Universal Electronics | Turtle Beach vs. VOXX International | Turtle Beach vs. Sonos Inc |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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