Correlation Between Target and Spectrum Brands
Can any of the company-specific risk be diversified away by investing in both Target and Spectrum Brands 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 Target and Spectrum Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Target and Spectrum Brands Holdings, you can compare the effects of market volatilities on Target and Spectrum Brands 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 Target with a short position of Spectrum Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Target and Spectrum Brands.
Diversification Opportunities for Target and Spectrum Brands
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Target and Spectrum is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Target and Spectrum Brands Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectrum Brands Holdings and Target 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 Target are associated (or correlated) with Spectrum Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectrum Brands Holdings has no effect on the direction of Target i.e., Target and Spectrum Brands go up and down completely randomly.
Pair Corralation between Target and Spectrum Brands
Considering the 90-day investment horizon Target is expected to under-perform the Spectrum Brands. But the stock apears to be less risky and, when comparing its historical volatility, Target is 1.05 times less risky than Spectrum Brands. The stock trades about -0.01 of its potential returns per unit of risk. The Spectrum Brands Holdings is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 8,080 in Spectrum Brands Holdings on January 24, 2024 and sell it today you would lose (99.00) from holding Spectrum Brands Holdings or give up 1.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Target vs. Spectrum Brands Holdings
Performance |
| Timeline |
| Target |
| Spectrum Brands Holdings |
Target and Spectrum Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Target and Spectrum Brands
The main advantage of trading using opposite Target and Spectrum Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Target position performs unexpectedly, Spectrum Brands 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 Spectrum Brands will offset losses from the drop in Spectrum Brands' long position.| Target vs. Big Lots | Target vs. Aquagold International | Target vs. Thrivent High Yield | Target vs. Morningstar Unconstrained Allocation |
| Spectrum Brands vs. Unilever PLC ADR | Spectrum Brands vs. Estee Lauder Companies | Spectrum Brands vs. ELF Beauty | Spectrum Brands vs. Coty 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |