Correlation Between Cooper Companies, and Chewy

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

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

Diversification Opportunities for Cooper Companies, and Chewy

-0.48

Correlation Coefficient

Cooper Companies,  Chewy

Very good diversification

The 3 months correlation between Cooper and Chewy is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding The Cooper Companies, and Chewy Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chewy Inc and Cooper Companies, 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 The Cooper Companies, are associated (or correlated) with Chewy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chewy Inc has no effect on the direction of Cooper Companies, i.e., Cooper Companies, and Chewy go up and down completely randomly.

Pair Corralation between Cooper Companies, and Chewy

Considering the 90-day investment horizon The Cooper Companies, is expected to under-perform the Chewy. But the stock apears to be less risky and, when comparing its historical volatility, The Cooper Companies, is 2.46 times less risky than Chewy. The stock trades about -0.12 of its potential returns per unit of risk. The Chewy Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  3,094  in Chewy Inc on September 12, 2024 and sell it today you would earn a total of  159.00  from holding Chewy Inc or generate 5.14% return on investment over 90 days.

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

The Cooper Companies,  vs.  Chewy Inc

Cooper Companies,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Cooper Companies, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Chewy Inc

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Chewy Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Chewy may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Cooper Companies, and Chewy

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

The idea behind The Cooper Companies, and Chewy Inc 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.