Correlation Between Floor Decor and Glorywin Entertainment

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

By analyzing existing cross correlation between Floor Decor Holdings and Glorywin Entertainment Group, you can compare the effects of market volatilities on Floor Decor and Glorywin Entertainment 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 Floor Decor with a short position of Glorywin Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Floor Decor and Glorywin Entertainment.

Diversification Opportunities for Floor Decor and Glorywin Entertainment

0.0

Correlation Coefficient

Floor Decor  Glorywin Entertainment

Pay attention - limited upside

The 3 months correlation between Floor and Glorywin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Floor Decor Holdings and Glorywin Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glorywin Entertainment and Floor Decor 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 Floor Decor Holdings are associated (or correlated) with Glorywin Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glorywin Entertainment has no effect on the direction of Floor Decor i.e., Floor Decor and Glorywin Entertainment go up and down completely randomly.

Pair Corralation between Floor Decor and Glorywin Entertainment

Considering the 90-day investment horizon Floor Decor Holdings is expected to under-perform the Glorywin Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Floor Decor Holdings is 1.34 times less risky than Glorywin Entertainment. The stock trades about -0.04 of its potential returns per unit of risk. The Glorywin Entertainment Group is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  12.00  in Glorywin Entertainment Group on October 9, 2024 and sell it today you would lose (2.00) from holding Glorywin Entertainment Group or give up 16.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.39%
Values	Daily Returns

Floor Decor Holdings  vs.  Glorywin Entertainment Group

Floor Decor Holdings

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Floor Decor Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Glorywin Entertainment

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Glorywin Entertainment Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Glorywin Entertainment is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Floor Decor and Glorywin Entertainment

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

The idea behind Floor Decor Holdings and Glorywin Entertainment Group 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.