Correlation Between Terminal X and Retailors

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

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

Diversification Opportunities for Terminal X and Retailors

0.0

Correlation Coefficient

Terminal X  Retailors

Pay attention - limited upside

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

Pair Corralation between Terminal X and Retailors

Assuming the 90 days trading horizon Terminal X Online is expected to generate 0.36 times more return on investment than Retailors. However, Terminal X Online is 2.74 times less risky than Retailors. It trades about 0.11 of its potential returns per unit of risk. Retailors is currently generating about -0.04 per unit of risk. If you would invest  47,840  in Terminal X Online on April 24, 2025 and sell it today you would earn a total of  3,770  from holding Terminal X Online or generate 7.88% return on investment over 90 days.

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

Terminal X Online  vs.  Retailors

Terminal X Online

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Terminal X Online are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Terminal X may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Retailors

Risk-Adjusted Performance

Very Weak

Over the last 90 days Retailors has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Terminal X and Retailors

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

The idea behind Terminal X Online and Retailors 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..