Correlation Between AKA Brands and Boohoo PLC
Can any of the company-specific risk be diversified away by investing in both AKA Brands and Boohoo PLC 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 AKA Brands and Boohoo PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AKA Brands Holding and BoohooCom PLC ADR, you can compare the effects of market volatilities on AKA Brands and Boohoo PLC 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 AKA Brands with a short position of Boohoo PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of AKA Brands and Boohoo PLC.
Diversification Opportunities for AKA Brands and Boohoo PLC
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AKA and Boohoo is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding AKA Brands Holding and BoohooCom PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BoohooCom PLC ADR and AKA Brands 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 AKA Brands Holding are associated (or correlated) with Boohoo PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BoohooCom PLC ADR has no effect on the direction of AKA Brands i.e., AKA Brands and Boohoo PLC go up and down completely randomly.
Pair Corralation between AKA Brands and Boohoo PLC
Considering the 90-day investment horizon AKA Brands Holding is expected to generate 2.44 times more return on investment than Boohoo PLC. However, AKA Brands is 2.44 times more volatile than BoohooCom PLC ADR. It trades about 0.04 of its potential returns per unit of risk. BoohooCom PLC ADR is currently generating about 0.01 per unit of risk. If you would invest 2,028 in AKA Brands Holding on September 3, 2024 and sell it today you would earn a total of 196.00 from holding AKA Brands Holding or generate 9.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
AKA Brands Holding vs. BoohooCom PLC ADR
Performance |
| Timeline |
| AKA Brands Holding |
| BoohooCom PLC ADR |
AKA Brands and Boohoo PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AKA Brands and Boohoo PLC
The main advantage of trading using opposite AKA Brands and Boohoo PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AKA Brands position performs unexpectedly, Boohoo PLC 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 Boohoo PLC will offset losses from the drop in Boohoo PLC's long position.| AKA Brands vs. Brilliant Earth Group | AKA Brands vs. Lulus Fashion Lounge | AKA Brands vs. Torrid Holdings | AKA Brands vs. Aveanna Healthcare Holdings |
| Boohoo PLC vs. TSS, Common Stock | Boohoo PLC vs. Aquagold International | Boohoo PLC vs. Morningstar Unconstrained Allocation | Boohoo PLC vs. High Yield Municipal Fund |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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