Correlation Between AKA Brands and ThredUp
Can any of the company-specific risk be diversified away by investing in both AKA Brands and ThredUp 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 ThredUp 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 ThredUp, you can compare the effects of market volatilities on AKA Brands and ThredUp 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 ThredUp. Check out your portfolio center. Please also check ongoing floating volatility patterns of AKA Brands and ThredUp.
Diversification Opportunities for AKA Brands and ThredUp
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AKA and ThredUp is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding AKA Brands Holding and ThredUp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ThredUp 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 ThredUp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ThredUp has no effect on the direction of AKA Brands i.e., AKA Brands and ThredUp go up and down completely randomly.
Pair Corralation between AKA Brands and ThredUp
Considering the 90-day investment horizon AKA Brands Holding is expected to under-perform the ThredUp. But the stock apears to be less risky and, when comparing its historical volatility, AKA Brands Holding is 2.5 times less risky than ThredUp. The stock trades about 0.0 of its potential returns per unit of risk. The ThredUp is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 62.00 in ThredUp on September 1, 2024 and sell it today you would earn a total of 90.00 from holding ThredUp or generate 145.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AKA Brands Holding vs. ThredUp
Performance |
| Timeline |
| AKA Brands Holding |
| ThredUp |
AKA Brands and ThredUp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AKA Brands and ThredUp
The main advantage of trading using opposite AKA Brands and ThredUp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AKA Brands position performs unexpectedly, ThredUp 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 ThredUp will offset losses from the drop in ThredUp'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 |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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