Correlation Between PARTS SOURCE and Advance Auto

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Can any of the company-specific risk be diversified away by investing in both PARTS SOURCE and Advance Auto 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 PARTS SOURCE and Advance Auto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PARTS SOURCE INC and Advance Auto Parts, you can compare the effects of market volatilities on PARTS SOURCE and Advance Auto 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 PARTS SOURCE with a short position of Advance Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARTS SOURCE and Advance Auto.

Diversification Opportunities for PARTS SOURCE and Advance Auto

0.0
  Correlation Coefficient

Pay attention - limited upside

The 2 months correlation between PARTS and Advance is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PARTS SOURCE INC and Advance Auto Parts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advance Auto Parts and PARTS SOURCE 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 PARTS SOURCE INC are associated (or correlated) with Advance Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advance Auto Parts has no effect on the direction of PARTS SOURCE i.e., PARTS SOURCE and Advance Auto go up and down completely randomly.

Pair Corralation between PARTS SOURCE and Advance Auto

If you would invest (100.00)  in PARTS SOURCE INC on March 28, 2022 and sell it today you would earn a total of  100.00  from holding PARTS SOURCE INC or generate -100.0% return on investment over 90 days.
Time Period2 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

PARTS SOURCE INC  vs.  Advance Auto Parts

 Performance (%) 
      Timeline 
PARTS SOURCE INC 
PARTS Performance
0 of 100
Over the last 90 days PARTS SOURCE INC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, PARTS SOURCE is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the insiders.
Advance Auto Parts 
Advance Performance
0 of 100
Over the last 90 days Advance Auto Parts has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in July 2022. The recent disarray may also be a sign of long period up-swing for the firm insiders.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0328
Payout Ratio
0.41
Last Split Factor
3:2
Forward Annual Dividend Rate
6.0
Dividend Date
2022-07-01
Ex Dividend Date
2022-06-16
Last Split Date
2005-09-26

Advance Price Channel

PARTS SOURCE and Advance Auto Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with PARTS SOURCE and Advance Auto

The main advantage of trading using opposite PARTS SOURCE and Advance Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARTS SOURCE position performs unexpectedly, Advance Auto 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 Advance Auto will offset losses from the drop in Advance Auto's long position.
The idea behind PARTS SOURCE INC and Advance Auto Parts 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.

Advance Auto Parts

Pair trading matchups for Advance Auto

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

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