Correlation Between Global E and Ollies Bargain

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

By analyzing existing cross correlation between Global E Online and Ollies Bargain Outlet, you can compare the effects of market volatilities on Global E and Ollies Bargain 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 Global E with a short position of Ollies Bargain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global E and Ollies Bargain.

Diversification Opportunities for Global E and Ollies Bargain

0.54

Correlation Coefficient

Global E  Ollies Bargain

Very weak diversification

The 3 months correlation between Global and Ollies is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Global E Online and Ollies Bargain Outlet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ollies Bargain Outlet and Global E 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 Global E Online are associated (or correlated) with Ollies Bargain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ollies Bargain Outlet has no effect on the direction of Global E i.e., Global E and Ollies Bargain go up and down completely randomly.

Pair Corralation between Global E and Ollies Bargain

Given the investment horizon of 90 days Global E Online is expected to under-perform the Ollies Bargain. In addition to that, Global E is 1.28 times more volatile than Ollies Bargain Outlet. It trades about -0.18 of its total potential returns per unit of risk. Ollies Bargain Outlet is currently generating about -0.1 per unit of volatility. If you would invest  11,763  in Ollies Bargain Outlet on December 19, 2024 and sell it today you would lose (1,857) from holding Ollies Bargain Outlet or give up 15.79% of portfolio value over 90 days.

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

Global E Online  vs.  Ollies Bargain Outlet

Global E Online

Risk-Adjusted Performance

Very Weak

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

Ollies Bargain Outlet

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ollies Bargain Outlet has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Global E and Ollies Bargain

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

The idea behind Global E Online and Ollies Bargain Outlet 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.