Correlation Between PETCO HEALTH and Ströer SE

Can any of the company-specific risk be diversified away by investing in both PETCO HEALTH and Ströer SE 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 PETCO HEALTH and Ströer SE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PETCO HEALTH CLA and Strer SE Co, you can compare the effects of market volatilities on PETCO HEALTH and Ströer SE 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 PETCO HEALTH with a short position of Ströer SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of PETCO HEALTH and Ströer SE.

Diversification Opportunities for PETCO HEALTH and Ströer SE

-0.01

Correlation Coefficient

PETCO HEALTH  Ströer SE

Good diversification

The 3 months correlation between PETCO and Ströer is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding PETCO HEALTH CLA and Strer SE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ströer SE and PETCO HEALTH 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 PETCO HEALTH CLA are associated (or correlated) with Ströer SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ströer SE has no effect on the direction of PETCO HEALTH i.e., PETCO HEALTH and Ströer SE go up and down completely randomly.

Pair Corralation between PETCO HEALTH and Ströer SE

Assuming the 90 days horizon PETCO HEALTH CLA is expected to generate 3.41 times more return on investment than Ströer SE. However, PETCO HEALTH is 3.41 times more volatile than Strer SE Co. It trades about 0.09 of its potential returns per unit of risk. Strer SE Co is currently generating about -0.02 per unit of risk. If you would invest  275.00  in PETCO HEALTH CLA on April 24, 2025 and sell it today you would earn a total of  76.00  from holding PETCO HEALTH CLA or generate 27.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

PETCO HEALTH CLA  vs.  Strer SE Co

PETCO HEALTH CLA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PETCO HEALTH CLA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PETCO HEALTH reported solid returns over the last few months and may actually be approaching a breakup point.

Ströer SE

Risk-Adjusted Performance

Very Weak

Over the last 90 days Strer SE Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Ströer SE 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 PETCO HEALTH and Ströer SE

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

The idea behind PETCO HEALTH CLA and Strer SE Co 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.