Correlation Between 1 800 and ODP Corp

Can any of the company-specific risk be diversified away by investing in both 1 800 and ODP Corp 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 ODP Corp 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 ODP Corp, you can compare the effects of market volatilities on 1 800 and ODP Corp 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 ODP Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1 800 and ODP Corp.

Diversification Opportunities for 1 800 and ODP Corp

-0.29

Correlation Coefficient

1 800  ODP Corp

Very good diversification

The 3 months correlation between FLWS and ODP is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding 1 800 FLOWERSCOM and ODP Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ODP Corp 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 ODP Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ODP Corp has no effect on the direction of 1 800 i.e., 1 800 and ODP Corp go up and down completely randomly.

Pair Corralation between 1 800 and ODP Corp

Given the investment horizon of 90 days 1 800 FLOWERSCOM is expected to generate 1.09 times more return on investment than ODP Corp. However, 1 800 is 1.09 times more volatile than ODP Corp. It trades about -0.02 of its potential returns per unit of risk. ODP Corp is currently generating about -0.14 per unit of risk. If you would invest  813.00  in 1 800 FLOWERSCOM on November 28, 2024 and sell it today you would lose (58.00) from holding 1 800 FLOWERSCOM or give up 7.13% of portfolio value over 90 days.

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

1 800 FLOWERSCOM  vs.  ODP Corp

1 800 FLOWERSCOM

Risk-Adjusted Performance

Very Weak

Over the last 90 days 1 800 FLOWERSCOM has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, 1 800 is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

ODP Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days ODP Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with 1 800 and ODP Corp

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

The idea behind 1 800 FLOWERSCOM and ODP Corp 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.