Correlation Between Albertsons Companies and Chewy

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

Diversification Opportunities for Albertsons Companies and Chewy

0.12
  Correlation Coefficient

Average diversification

The 3 months correlation between Albertsons and Chewy is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Albertsons Companies Inc and Chewy Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chewy Inc and Albertsons Companies 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 Albertsons Companies are associated (or correlated) with Chewy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chewy Inc has no effect on the direction of Albertsons Companies i.e., Albertsons Companies and Chewy go up and down completely randomly.

Pair Corralation between Albertsons Companies and Chewy

Considering the 90-day investment horizon Albertsons Companies is expected to generate 0.59 times more return on investment than Chewy. However, Albertsons Companies is 1.7 times less risky than Chewy. It trades about 0.06 of its potential returns per unit of risk. Chewy Inc is currently generating about 0.0 per unit of risk. If you would invest  1,367  in Albertsons Companies on June 29, 2022 and sell it today you would earn a total of  1,135  from holding Albertsons Companies or generate 83.03% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Albertsons Companies Inc  vs.  Chewy Inc

 Performance (%) 
       Timeline  
Albertsons Companies 
Albertsons Performance
0 of 100
Over the last 90 days Albertsons Companies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Albertsons Price Channel

Chewy Inc 
Chewy Performance
0 of 100
Over the last 90 days Chewy Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Chewy is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Chewy Price Channel

Albertsons Companies and Chewy Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Albertsons Companies and Chewy

The main advantage of trading using opposite Albertsons Companies and Chewy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albertsons Companies position performs unexpectedly, Chewy 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 Chewy will offset losses from the drop in Chewy's long position.
Albertsons Companies vs. Clearwater Paper Corp
The idea behind Albertsons Companies and Chewy Inc 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.
Chewy vs. Clearwater Paper Corp
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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