Correlation Between AKA Brands and Torrid Holdings
Can any of the company-specific risk be diversified away by investing in both AKA Brands and Torrid Holdings 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 Torrid Holdings 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 Torrid Holdings, you can compare the effects of market volatilities on AKA Brands and Torrid Holdings 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 Torrid Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of AKA Brands and Torrid Holdings.
Diversification Opportunities for AKA Brands and Torrid Holdings
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AKA and Torrid is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding AKA Brands Holding and Torrid Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Torrid Holdings 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 Torrid Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Torrid Holdings has no effect on the direction of AKA Brands i.e., AKA Brands and Torrid Holdings go up and down completely randomly.
Pair Corralation between AKA Brands and Torrid Holdings
Considering the 90-day investment horizon AKA Brands Holding is expected to generate 1.34 times more return on investment than Torrid Holdings. However, AKA Brands is 1.34 times more volatile than Torrid Holdings. It trades about 0.06 of its potential returns per unit of risk. Torrid Holdings is currently generating about 0.05 per unit of risk. If you would invest 1,025 in AKA Brands Holding on November 3, 2024 and sell it today you would earn a total of 653.00 from holding AKA Brands Holding or generate 63.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AKA Brands Holding vs. Torrid Holdings
Performance |
| Timeline |
| AKA Brands Holding |
| Torrid Holdings |
AKA Brands and Torrid Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AKA Brands and Torrid Holdings
The main advantage of trading using opposite AKA Brands and Torrid Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AKA Brands position performs unexpectedly, Torrid Holdings 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 Torrid Holdings will offset losses from the drop in Torrid Holdings' 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 |
| Torrid Holdings vs. Cato Corporation | Torrid Holdings vs. Shoe Carnival | Torrid Holdings vs. Genesco | Torrid Holdings vs. Zumiez Inc |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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