Correlation Between Pets At and SBA Communications

Can any of the company-specific risk be diversified away by investing in both Pets At and SBA Communications 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 Pets At and SBA Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pets at Home and SBA Communications Corp, you can compare the effects of market volatilities on Pets At and SBA Communications 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 Pets At with a short position of SBA Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pets At and SBA Communications.

Diversification Opportunities for Pets At and SBA Communications

-0.18

Correlation Coefficient

Pets At  SBA Communications

Good diversification

The 3 months correlation between Pets and SBA is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Pets at Home and SBA Communications Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBA Communications Corp and Pets At 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 Pets at Home are associated (or correlated) with SBA Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBA Communications Corp has no effect on the direction of Pets At i.e., Pets At and SBA Communications go up and down completely randomly.

Pair Corralation between Pets At and SBA Communications

Assuming the 90 days horizon Pets at Home is expected to generate 0.95 times more return on investment than SBA Communications. However, Pets at Home is 1.06 times less risky than SBA Communications. It trades about 0.07 of its potential returns per unit of risk. SBA Communications Corp is currently generating about 0.05 per unit of risk. If you would invest  263.00  in Pets at Home on April 24, 2025 and sell it today you would earn a total of  16.00  from holding Pets at Home or generate 6.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Pets at Home  vs.  SBA Communications Corp

Pets at Home

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pets at Home are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Pets At may actually be approaching a critical reversion point that can send shares even higher in August 2025.

SBA Communications Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SBA Communications Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, SBA Communications is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Pets At and SBA Communications

The main advantage of trading using opposite Pets At and SBA Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pets At position performs unexpectedly, SBA Communications 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 SBA Communications will offset losses from the drop in SBA Communications' long position.

The idea behind Pets at Home and SBA Communications Corp 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.