Correlation Between Barnes Noble and Spectrum Brands

Can any of the company-specific risk be diversified away by investing in both Barnes Noble 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 Barnes Noble and Spectrum Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Barnes Noble and Spectrum Brands Holdings, you can compare the effects of market volatilities on Barnes Noble 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 Barnes Noble with a short position of Spectrum Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barnes Noble and Spectrum Brands.

Diversification Opportunities for Barnes Noble and Spectrum Brands

0.0

Correlation Coefficient

Barnes Noble  Spectrum Brands

Pay attention - limited upside

The 3 months correlation between Barnes and Spectrum is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Noble 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 Barnes Noble 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 Barnes Noble 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 Barnes Noble i.e., Barnes Noble and Spectrum Brands go up and down completely randomly.

Pair Corralation between Barnes Noble and Spectrum Brands

If you would invest (100.00) in Barnes Noble on February 5, 2024 and sell it today you would earn a total of  100.00  from holding Barnes Noble 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

Barnes Noble  vs.  Spectrum Brands Holdings

Barnes Noble

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Barnes Noble has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward-looking signals, Barnes Noble is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Spectrum Brands Holdings

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Spectrum Brands Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Spectrum Brands may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Barnes Noble and Spectrum Brands

The main advantage of trading using opposite Barnes Noble and Spectrum Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnes Noble 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.

The idea behind Barnes Noble and Spectrum Brands Holdings 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.