Correlation Between AKA Brands and TheRealReal
Can any of the company-specific risk be diversified away by investing in both AKA Brands and TheRealReal 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 TheRealReal 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 TheRealReal, you can compare the effects of market volatilities on AKA Brands and TheRealReal 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 TheRealReal. Check out your portfolio center. Please also check ongoing floating volatility patterns of AKA Brands and TheRealReal.
Diversification Opportunities for AKA Brands and TheRealReal
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AKA and TheRealReal is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding AKA Brands Holding and TheRealReal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TheRealReal 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 TheRealReal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TheRealReal has no effect on the direction of AKA Brands i.e., AKA Brands and TheRealReal go up and down completely randomly.
Pair Corralation between AKA Brands and TheRealReal
Considering the 90-day investment horizon AKA Brands Holding is expected to under-perform the TheRealReal. In addition to that, AKA Brands is 1.45 times more volatile than TheRealReal. It trades about -0.07 of its total potential returns per unit of risk. TheRealReal is currently generating about -0.06 per unit of volatility. If you would invest 984.00 in TheRealReal on November 2, 2024 and sell it today you would lose (55.00) from holding TheRealReal or give up 5.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AKA Brands Holding vs. TheRealReal
Performance |
| Timeline |
| AKA Brands Holding |
| TheRealReal |
AKA Brands and TheRealReal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AKA Brands and TheRealReal
The main advantage of trading using opposite AKA Brands and TheRealReal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AKA Brands position performs unexpectedly, TheRealReal 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 TheRealReal will offset losses from the drop in TheRealReal'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 |
| TheRealReal vs. Capri Holdings | TheRealReal vs. Movado Group | TheRealReal vs. Tapestry | TheRealReal vs. Brilliant Earth Group |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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