Correlation Between Target Corp and Ollies Bargain

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

Diversification Opportunities for Target Corp and Ollies Bargain

-0.15
  Correlation Coefficient

Good diversification

The 3 months correlation between Target and Ollies is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Target Corp and Ollies Bargain CS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ollies Bargain CS and Target Corp 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 Corp are associated (or correlated) with Ollies Bargain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ollies Bargain CS has no effect on the direction of Target Corp i.e., Target Corp and Ollies Bargain go up and down completely randomly.

Pair Corralation between Target Corp and Ollies Bargain

Considering the 90-day investment horizon Target Corp is expected to under-perform the Ollies Bargain. But the stock apears to be less risky and, when comparing its historical volatility, Target Corp is 1.37 times less risky than Ollies Bargain. The stock trades about -0.2 of its potential returns per unit of risk. The Ollies Bargain CS is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  5,482  in Ollies Bargain CS on July 3, 2022 and sell it today you would lose (322.00)  from holding Ollies Bargain CS or give up 5.87% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Target Corp  vs.  Ollies Bargain CS

 Performance (%) 
       Timeline  
Target Corp 
Target Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Target Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Target Corp is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Target Price Channel

Ollies Bargain CS 
Ollies Performance
0 of 100
Over the last 90 days Ollies Bargain CS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in November 2022. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Ollies Price Channel

Target Corp and Ollies Bargain Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Target Corp and Ollies Bargain

The main advantage of trading using opposite Target Corp and Ollies Bargain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Target Corp position performs unexpectedly, Ollies Bargain 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 Ollies Bargain will offset losses from the drop in Ollies Bargain's long position.
Target Corp vs. Amazon Inc
The idea behind Target Corp and Ollies Bargain CS 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.
Ollies Bargain vs. Amazon 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 ETF Directory module to find actively traded Exchange Traded Funds (ETF) from around the world.

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