Correlation Between 1 800 and Network CN

Can any of the company-specific risk be diversified away by investing in both 1 800 and Network CN 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 1 800 and Network CN into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 1 800 FLOWERSCOM and Network CN, you can compare the effects of market volatilities on 1 800 and Network CN 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 1 800 with a short position of Network CN. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1 800 and Network CN.

Diversification Opportunities for 1 800 and Network CN

0.33

Correlation Coefficient

1 800  Network CN

Weak diversification

The 3 months correlation between FLWS and Network is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding 1 800 FLOWERSCOM and Network CN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Network CN and 1 800 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 1 800 FLOWERSCOM are associated (or correlated) with Network CN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Network CN has no effect on the direction of 1 800 i.e., 1 800 and Network CN go up and down completely randomly.

Pair Corralation between 1 800 and Network CN

Given the investment horizon of 90 days 1 800 is expected to generate 98.8 times less return on investment than Network CN. But when comparing it to its historical volatility, 1 800 FLOWERSCOM is 43.29 times less risky than Network CN. It trades about 0.08 of its potential returns per unit of risk. Network CN is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  104.00  in Network CN on October 25, 2024 and sell it today you would lose (99.68) from holding Network CN or give up 95.85% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

1 800 FLOWERSCOM  vs.  Network CN

1 800 FLOWERSCOM

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in 1 800 FLOWERSCOM are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, 1 800 unveiled solid returns over the last few months and may actually be approaching a breakup point.

Network CN

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Network CN are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent fundamental indicators, Network CN displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 1 800 and Network CN

The main advantage of trading using opposite 1 800 and Network CN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1 800 position performs unexpectedly, Network CN 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 Network CN will offset losses from the drop in Network CN's long position.

The idea behind 1 800 FLOWERSCOM and Network CN 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.

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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.