Correlation Between Contextlogic and Best Buy
Can any of the company-specific risk be diversified away by investing in both Contextlogic 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 Contextlogic and Best Buy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Contextlogic and Best Buy Co, you can compare the effects of market volatilities on Contextlogic 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 Contextlogic with a short position of Best Buy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Contextlogic and Best Buy.
Diversification Opportunities for Contextlogic and Best Buy
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Contextlogic and Best is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Contextlogic and Best Buy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Best Buy and Contextlogic 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 Contextlogic 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 Contextlogic i.e., Contextlogic and Best Buy go up and down completely randomly.
Pair Corralation between Contextlogic and Best Buy
Given the investment horizon of 90 days Contextlogic is expected to generate 1.57 times more return on investment than Best Buy. However, Contextlogic is 1.57 times more volatile than Best Buy Co. It trades about 0.07 of its potential returns per unit of risk. Best Buy Co is currently generating about 0.08 per unit of risk. If you would invest 678.00 in Contextlogic on April 19, 2025 and sell it today you would earn a total of 61.00 from holding Contextlogic or generate 9.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 72.13% |
| Values | Daily Returns |
Contextlogic vs. Best Buy Co
Performance |
| Timeline |
| Contextlogic |
Risk-Adjusted Performance
Modest
Weak | Strong |
| Best Buy |
Contextlogic and Best Buy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Contextlogic and Best Buy
The main advantage of trading using opposite Contextlogic and Best Buy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Contextlogic 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.| Contextlogic vs. El Pollo Loco | Contextlogic vs. Affinity Beverage Group | Contextlogic vs. Westrock Coffee | Contextlogic vs. Vita Coco |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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