Correlation Between Qurate Retail and Marks

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

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

Diversification Opportunities for Qurate Retail and Marks

0.25

Correlation Coefficient

Qurate Retail  Marks

Modest diversification

The 3 months correlation between Qurate and Marks is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Qurate Retail Series and Marks and Spencer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marks and Spencer and Qurate Retail 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 Qurate Retail Series are associated (or correlated) with Marks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marks and Spencer has no effect on the direction of Qurate Retail i.e., Qurate Retail and Marks go up and down completely randomly.

Pair Corralation between Qurate Retail and Marks

Assuming the 90 days trading horizon Qurate Retail Series is expected to under-perform the Marks. In addition to that, Qurate Retail is 2.12 times more volatile than Marks and Spencer. It trades about -0.08 of its total potential returns per unit of risk. Marks and Spencer is currently generating about -0.13 per unit of volatility. If you would invest  37,821  in Marks and Spencer on October 25, 2024 and sell it today you would lose (3,891) from holding Marks and Spencer or give up 10.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	97.56%
Values	Daily Returns

Qurate Retail Series  vs.  Marks and Spencer

Qurate Retail Series

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Qurate Retail Series has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Marks and Spencer

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marks and Spencer has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Qurate Retail and Marks

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

The idea behind Qurate Retail Series and Marks and Spencer 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.