Correlation Between ODP Corp and Camping World

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

By analyzing existing cross correlation between ODP Corp and Camping World Holdings, you can compare the effects of market volatilities on ODP Corp and Camping World 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 ODP Corp with a short position of Camping World. Check out your portfolio center. Please also check ongoing floating volatility patterns of ODP Corp and Camping World.

Diversification Opportunities for ODP Corp and Camping World

-0.47

Correlation Coefficient

ODP Corp  Camping World

Very good diversification

The 3 months correlation between ODP and Camping is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding ODP Corp and Camping World Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camping World Holdings and ODP Corp 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 ODP Corp are associated (or correlated) with Camping World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camping World Holdings has no effect on the direction of ODP Corp i.e., ODP Corp and Camping World go up and down completely randomly.

Pair Corralation between ODP Corp and Camping World

Considering the 90-day investment horizon ODP Corp is expected to generate 7.68 times less return on investment than Camping World. But when comparing it to its historical volatility, ODP Corp is 1.2 times less risky than Camping World. It trades about 0.01 of its potential returns per unit of risk. Camping World Holdings is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  2,202  in Camping World Holdings on September 12, 2024 and sell it today you would earn a total of  286.00  from holding Camping World Holdings or generate 12.99% return on investment over 90 days.

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

ODP Corp  vs.  Camping World Holdings

ODP Corp

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days ODP Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, ODP Corp is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Camping World Holdings

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Camping World Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Camping World demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ODP Corp and Camping World

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

The idea behind ODP Corp and Camping World Holdings 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.