Correlation Between QEP Resources and Best Buy
Can any of the company-specific risk be diversified away by investing in both QEP Resources and Best Buy 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 QEP Resources and Best Buy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between QEP Resources and Best Buy Co, you can compare the effects of market volatilities on QEP Resources 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 QEP Resources with a short position of Best Buy. Check out your portfolio center. Please also check ongoing floating volatility patterns of QEP Resources and Best Buy.
Diversification Opportunities for QEP Resources and Best Buy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between QEP and Best is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding QEP Resources and Best Buy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Best Buy and QEP Resources 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 QEP Resources 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 has no effect on the direction of QEP Resources i.e., QEP Resources and Best Buy go up and down completely randomly.
Pair Corralation between QEP Resources and Best Buy
If you would invest 7,620 in Best Buy Co on January 16, 2024 and sell it today you would earn a total of 9.00 from holding Best Buy Co or generate 0.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
QEP Resources vs. Best Buy Co
Performance |
Timeline |
QEP Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Best Buy |
QEP Resources and Best Buy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with QEP Resources and Best Buy
The main advantage of trading using opposite QEP Resources and Best Buy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QEP Resources position performs unexpectedly, Best Buy 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 Best Buy will offset losses from the drop in Best Buy's long position.QEP Resources vs. Sandstorm Gold Ltd | QEP Resources vs. Aerofoam Metals | QEP Resources vs. Eastern Co | QEP Resources vs. HNI Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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