Correlation Between Abercrombie Fitch and Duluth Holdings
Can any of the company-specific risk be diversified away by investing in both Abercrombie Fitch and Duluth 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 Abercrombie Fitch and Duluth Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abercrombie Fitch and Duluth Holdings, you can compare the effects of market volatilities on Abercrombie Fitch and Duluth 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 Abercrombie Fitch with a short position of Duluth Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abercrombie Fitch and Duluth Holdings.
Diversification Opportunities for Abercrombie Fitch and Duluth Holdings
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Abercrombie and Duluth is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Abercrombie Fitch and Duluth Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duluth Holdings and Abercrombie Fitch 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 Abercrombie Fitch are associated (or correlated) with Duluth Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duluth Holdings has no effect on the direction of Abercrombie Fitch i.e., Abercrombie Fitch and Duluth Holdings go up and down completely randomly.
Pair Corralation between Abercrombie Fitch and Duluth Holdings
Considering the 90-day investment horizon Abercrombie Fitch is expected to generate 0.95 times more return on investment than Duluth Holdings. However, Abercrombie Fitch is 1.05 times less risky than Duluth Holdings. It trades about 0.14 of its potential returns per unit of risk. Duluth Holdings is currently generating about 0.13 per unit of risk. If you would invest 13,654 in Abercrombie Fitch on August 31, 2024 and sell it today you would earn a total of 1,202 from holding Abercrombie Fitch or generate 8.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abercrombie Fitch vs. Duluth Holdings
Performance |
| Timeline |
| Abercrombie Fitch |
| Duluth Holdings |
Abercrombie Fitch and Duluth Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abercrombie Fitch and Duluth Holdings
The main advantage of trading using opposite Abercrombie Fitch and Duluth Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abercrombie Fitch position performs unexpectedly, Duluth 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 Duluth Holdings will offset losses from the drop in Duluth Holdings' long position.| Abercrombie Fitch vs. Urban Outfitters | Abercrombie Fitch vs. Foot Locker | Abercrombie Fitch vs. Childrens Place | Abercrombie Fitch vs. American Eagle Outfitters |
| Duluth Holdings vs. Zumiez Inc | Duluth Holdings vs. JJill Inc | Duluth Holdings vs. Shoe Carnival | Duluth Holdings vs. Cato Corporation |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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