Correlation Between Shoe Carnival and Peoples Educational

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

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

Diversification Opportunities for Shoe Carnival and Peoples Educational

0.29

Correlation Coefficient

Shoe Carnival  Peoples Educational

Modest diversification

The 3 months correlation between Shoe and Peoples is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Shoe Carnival and Peoples Educational Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peoples Educational and Shoe Carnival 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 Shoe Carnival are associated (or correlated) with Peoples Educational. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peoples Educational has no effect on the direction of Shoe Carnival i.e., Shoe Carnival and Peoples Educational go up and down completely randomly.

Pair Corralation between Shoe Carnival and Peoples Educational

Given the investment horizon of 90 days Shoe Carnival is expected to generate 188.27 times less return on investment than Peoples Educational. But when comparing it to its historical volatility, Shoe Carnival is 30.84 times less risky than Peoples Educational. It trades about 0.01 of its potential returns per unit of risk. Peoples Educational Holdings is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Peoples Educational Holdings on September 13, 2024 and sell it today you would earn a total of  0.99  from holding Peoples Educational Holdings or generate 9900.0% return on investment over 90 days.

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

Shoe Carnival  vs.  Peoples Educational Holdings

Shoe Carnival

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shoe Carnival has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Peoples Educational

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Peoples Educational Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Shoe Carnival and Peoples Educational

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

The idea behind Shoe Carnival and Peoples Educational Holdings 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.