Correlation Between Ollies Bargain and C WorldWide

Can any of the company-specific risk be diversified away by investing in both Ollies Bargain and C WorldWide 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 Ollies Bargain and C WorldWide into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ollies Bargain Outlet and C WorldWide Emerging, you can compare the effects of market volatilities on Ollies Bargain and C WorldWide 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 Ollies Bargain with a short position of C WorldWide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ollies Bargain and C WorldWide.

Diversification Opportunities for Ollies Bargain and C WorldWide

-0.07

Correlation Coefficient

Ollies Bargain  C WorldWide

Good diversification

The 3 months correlation between Ollies and CWIEMMKL is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Ollies Bargain Outlet and C WorldWide Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C WorldWide Emerging and Ollies Bargain 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 Ollies Bargain Outlet are associated (or correlated) with C WorldWide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C WorldWide Emerging has no effect on the direction of Ollies Bargain i.e., Ollies Bargain and C WorldWide go up and down completely randomly.

Pair Corralation between Ollies Bargain and C WorldWide

Given the investment horizon of 90 days Ollies Bargain Outlet is expected to generate 2.77 times more return on investment than C WorldWide. However, Ollies Bargain is 2.77 times more volatile than C WorldWide Emerging. It trades about 0.03 of its potential returns per unit of risk. C WorldWide Emerging is currently generating about 0.03 per unit of risk. If you would invest  6,090  in Ollies Bargain Outlet on January 24, 2024 and sell it today you would earn a total of  1,280  from holding Ollies Bargain Outlet or generate 21.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.99%
Values	Daily Returns

Ollies Bargain Outlet  vs.  C WorldWide Emerging

Ollies Bargain Outlet

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ollies Bargain Outlet are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong essential indicators, Ollies Bargain is not utilizing all of its potentials. The new stock price confusion, may contribute to short-horizon losses for the traders.

C WorldWide Emerging

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in C WorldWide Emerging are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent primary indicators, C WorldWide is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Ollies Bargain and C WorldWide

The main advantage of trading using opposite Ollies Bargain and C WorldWide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ollies Bargain position performs unexpectedly, C WorldWide 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 C WorldWide will offset losses from the drop in C WorldWide's long position.

The idea behind Ollies Bargain Outlet and C WorldWide Emerging pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.