Correlation Between Kohls Corp and 1 800

Can any of the company-specific risk be diversified away by investing in both Kohls Corp and 1 800 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 Kohls Corp and 1 800 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kohls Corp and 1 800 FLOWERSCOM, you can compare the effects of market volatilities on Kohls Corp and 1 800 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 Kohls Corp with a short position of 1 800. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kohls Corp and 1 800.

Diversification Opportunities for Kohls Corp and 1 800

0.72

Correlation Coefficient

Kohls Corp  1 800

Poor diversification

The 3 months correlation between Kohls and FLWS is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Kohls Corp and 1 800 FLOWERSCOM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1 800 FLOWERSCOM and Kohls 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 Kohls Corp are associated (or correlated) with 1 800. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1 800 FLOWERSCOM has no effect on the direction of Kohls Corp i.e., Kohls Corp and 1 800 go up and down completely randomly.

Pair Corralation between Kohls Corp and 1 800

Considering the 90-day investment horizon Kohls Corp is expected to generate 1.61 times more return on investment than 1 800. However, Kohls Corp is 1.61 times more volatile than 1 800 FLOWERSCOM. It trades about -0.05 of its potential returns per unit of risk. 1 800 FLOWERSCOM is currently generating about -0.08 per unit of risk. If you would invest  2,569  in Kohls Corp on February 4, 2024 and sell it today you would lose (104.00) from holding Kohls Corp or give up 4.05% of portfolio value over 90 days.

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

Kohls Corp  vs.  1 800 FLOWERSCOM

Kohls Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kohls Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Kohls Corp is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

1 800 FLOWERSCOM

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 1 800 FLOWERSCOM has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Kohls Corp and 1 800

The main advantage of trading using opposite Kohls Corp and 1 800 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kohls Corp position performs unexpectedly, 1 800 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 1 800 will offset losses from the drop in 1 800's long position.

The idea behind Kohls Corp and 1 800 FLOWERSCOM 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.