Correlation Between Target and Barnes Noble

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

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

Diversification Opportunities for Target and Barnes Noble

0.0

Correlation Coefficient

Target  Barnes Noble

Pay attention - limited upside

The 3 months correlation between Target and Barnes is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Target and Barnes Noble in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barnes Noble and Target 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 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 Target i.e., Target and Barnes Noble go up and down completely randomly.

Pair Corralation between Target and Barnes Noble

If you would invest (100.00) in Barnes Noble on January 20, 2024 and sell it today you would earn a total of  100.00  from holding Barnes Noble or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Target  vs.  Barnes Noble

Target

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Target are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent technical and fundamental indicators, Target unveiled solid returns over the last few months and may actually be approaching a breakup point.

Barnes Noble

Risk-Adjusted Performance

0 of 100

Very Weak

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 newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Target and Barnes Noble

The main advantage of trading using opposite Target and Barnes Noble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Target 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 Target 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..