Correlation Between Advance Auto and Acorn International
Can any of the company-specific risk be diversified away by investing in both Advance Auto and Acorn International 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 Advance Auto and Acorn International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advance Auto Parts and Acorn International, you can compare the effects of market volatilities on Advance Auto and Acorn International 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 Advance Auto with a short position of Acorn International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advance Auto and Acorn International.
Diversification Opportunities for Advance Auto and Acorn International
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Advance and Acorn is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Advance Auto Parts and Acorn International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acorn International and Advance Auto 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 Advance Auto Parts are associated (or correlated) with Acorn International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acorn International has no effect on the direction of Advance Auto i.e., Advance Auto and Acorn International go up and down completely randomly.
Pair Corralation between Advance Auto and Acorn International
If you would invest (100.00) in Acorn International on January 26, 2024 and sell it today you would earn a total of 100.00 from holding Acorn International 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 |
Advance Auto Parts vs. Acorn International
Performance |
| Timeline |
| Advance Auto Parts |
| Acorn International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Advance Auto and Acorn International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advance Auto and Acorn International
The main advantage of trading using opposite Advance Auto and Acorn International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advance Auto position performs unexpectedly, Acorn International 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 Acorn International will offset losses from the drop in Acorn International's long position.| Advance Auto vs. Target | Advance Auto vs. Lowes Companies | Advance Auto vs. Kohls Corp | Advance Auto vs. Gap Inc |
| Acorn International vs. Aduro Clean Technologies | Acorn International vs. Saratoga Investment Corp | Acorn International vs. Ultra Clean Holdings | Acorn International vs. Artisan Partners Asset |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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