Correlation Between DraftKings and Best Buy
Can any of the company-specific risk be diversified away by investing in both DraftKings and Best Buy 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 DraftKings and Best Buy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DraftKings and Best Buy Co, you can compare the effects of market volatilities on DraftKings and Best Buy 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 DraftKings with a short position of Best Buy. Check out your portfolio center. Please also check ongoing floating volatility patterns of DraftKings and Best Buy.
Diversification Opportunities for DraftKings and Best Buy
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DraftKings and Best is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding DraftKings and Best Buy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Best Buy and DraftKings 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 DraftKings are associated (or correlated) with Best Buy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Best Buy has no effect on the direction of DraftKings i.e., DraftKings and Best Buy go up and down completely randomly.
Pair Corralation between DraftKings and Best Buy
Given the investment horizon of 90 days DraftKings is expected to generate 1.3 times more return on investment than Best Buy. However, DraftKings is 1.3 times more volatile than Best Buy Co. It trades about 0.01 of its potential returns per unit of risk. Best Buy Co is currently generating about -0.01 per unit of risk. If you would invest 3,520 in DraftKings on October 9, 2025 and sell it today you would lose (25.00) from holding DraftKings or give up 0.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DraftKings vs. Best Buy Co
Performance |
| Timeline |
| DraftKings |
| Best Buy |
DraftKings and Best Buy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DraftKings and Best Buy
The main advantage of trading using opposite DraftKings and Best Buy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DraftKings position performs unexpectedly, Best Buy 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 Best Buy will offset losses from the drop in Best Buy's long position.| DraftKings vs. Wynn Resorts Limited | DraftKings vs. Honda Motor Co | DraftKings vs. Wayfair | DraftKings vs. Rivian Automotive |
| Best Buy vs. Genuine Parts Co | Best Buy vs. Dicks Sporting Goods | Best Buy vs. Caseys General Stores | Best Buy vs. Burlington Stores |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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