Correlation Between AKA Brands and Wayfair
Can any of the company-specific risk be diversified away by investing in both AKA Brands and Wayfair 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 AKA Brands and Wayfair into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AKA Brands Holding and Wayfair, you can compare the effects of market volatilities on AKA Brands and Wayfair 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 AKA Brands with a short position of Wayfair. Check out your portfolio center. Please also check ongoing floating volatility patterns of AKA Brands and Wayfair.
Diversification Opportunities for AKA Brands and Wayfair
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between AKA and Wayfair is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding AKA Brands Holding and Wayfair in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wayfair and AKA 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 AKA Brands Holding are associated (or correlated) with Wayfair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wayfair has no effect on the direction of AKA Brands i.e., AKA Brands and Wayfair go up and down completely randomly.
Pair Corralation between AKA Brands and Wayfair
Considering the 90-day investment horizon AKA Brands Holding is expected to under-perform the Wayfair. In addition to that, AKA Brands is 1.68 times more volatile than Wayfair. It trades about -0.01 of its total potential returns per unit of risk. Wayfair is currently generating about 0.07 per unit of volatility. If you would invest 4,318 in Wayfair on September 7, 2024 and sell it today you would earn a total of 611.00 from holding Wayfair or generate 14.15% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
AKA Brands Holding vs. Wayfair
Performance |
Timeline |
AKA Brands Holding |
Wayfair |
AKA Brands and Wayfair Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AKA Brands and Wayfair
The main advantage of trading using opposite AKA Brands and Wayfair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AKA Brands position performs unexpectedly, Wayfair 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 Wayfair will offset losses from the drop in Wayfair's long position.AKA Brands vs. Brilliant Earth Group | AKA Brands vs. Lulus Fashion Lounge | AKA Brands vs. Torrid Holdings | AKA Brands vs. Aveanna Healthcare Holdings |
Wayfair vs. Alibaba Group Holding | Wayfair vs. Sea | Wayfair vs. Vipshop Holdings Limited | Wayfair vs. Jumia Technologies AG |
Check out your portfolio center.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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |