Correlation Between Ulta Beauty and EBay
Can any of the company-specific risk be diversified away by investing in both Ulta Beauty and EBay 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 Ulta Beauty and EBay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ulta Beauty and EBay Inc NT, you can compare the effects of market volatilities on Ulta Beauty and EBay 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 Ulta Beauty with a short position of EBay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ulta Beauty and EBay.
Diversification Opportunities for Ulta Beauty and EBay
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ulta and EBay is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ulta Beauty and EBay Inc NT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EBay Inc NT and Ulta Beauty 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 Ulta Beauty are associated (or correlated) with EBay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EBay Inc NT has no effect on the direction of Ulta Beauty i.e., Ulta Beauty and EBay go up and down completely randomly.
Pair Corralation between Ulta Beauty and EBay
If you would invest (100.00) in EBay Inc NT on January 20, 2024 and sell it today you would earn a total of 100.00 from holding EBay Inc NT or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Ulta Beauty vs. EBay Inc NT
Performance |
Timeline |
Ulta Beauty |
EBay Inc NT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ulta Beauty and EBay Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ulta Beauty and EBay
The main advantage of trading using opposite Ulta Beauty and EBay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ulta Beauty position performs unexpectedly, EBay 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 EBay will offset losses from the drop in EBay's long position.Ulta Beauty vs. OReilly Automotive | Ulta Beauty vs. AutoZone | Ulta Beauty vs. Genuine Parts Co | Ulta Beauty vs. Williams Sonoma |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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