Correlation Between Spectrum Brands and Barnes Noble

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

Diversification Opportunities for Spectrum Brands and Barnes Noble

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Spectrum and Barnes is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Spectrum Brands Holdings and Barnes Noble in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barnes Noble and Spectrum Brands 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 Spectrum Brands Holdings are associated (or correlated) with Barnes Noble. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barnes Noble has no effect on the direction of Spectrum Brands i.e., Spectrum Brands and Barnes Noble go up and down completely randomly.

Pair Corralation between Spectrum Brands and Barnes Noble

If you would invest  8,067  in Spectrum Brands Holdings on December 30, 2023 and sell it today you would earn a total of  834.00  from holding Spectrum Brands Holdings or generate 10.34% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Spectrum Brands Holdings  vs.  Barnes Noble

 Performance 
       Timeline  
Spectrum Brands Holdings 

Risk-Adjusted Performance

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OK
Compared to the overall equity markets, risk-adjusted returns on investments in Spectrum Brands Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, Spectrum Brands may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Barnes Noble 

Risk-Adjusted Performance

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

Spectrum Brands and Barnes Noble Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Spectrum Brands and Barnes Noble

The main advantage of trading using opposite Spectrum Brands and Barnes Noble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spectrum Brands position performs unexpectedly, Barnes Noble 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 Barnes Noble will offset losses from the drop in Barnes Noble's long position.
The idea behind Spectrum Brands Holdings and Barnes Noble 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

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