Correlation Between Abercrombie Fitch and GPS Old
Can any of the company-specific risk be diversified away by investing in both Abercrombie Fitch and GPS Old 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 GPS Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abercrombie Fitch and GPS Old, you can compare the effects of market volatilities on Abercrombie Fitch and GPS Old 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 GPS Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abercrombie Fitch and GPS Old.
Diversification Opportunities for Abercrombie Fitch and GPS Old
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Abercrombie and GPS is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Abercrombie Fitch and GPS Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GPS Old 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 GPS Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GPS Old has no effect on the direction of Abercrombie Fitch i.e., Abercrombie Fitch and GPS Old go up and down completely randomly.
Pair Corralation between Abercrombie Fitch and GPS Old
If you would invest 2,328 in GPS Old on October 24, 2024 and sell it today you would earn a total of 0.00 from holding GPS Old or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 5.56% |
| Values | Daily Returns |
Abercrombie Fitch vs. GPS Old
Performance |
| Timeline |
| Abercrombie Fitch |
| GPS Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Abercrombie Fitch and GPS Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abercrombie Fitch and GPS Old
The main advantage of trading using opposite Abercrombie Fitch and GPS Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abercrombie Fitch position performs unexpectedly, GPS Old 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 GPS Old will offset losses from the drop in GPS Old's long position.| Abercrombie Fitch vs. Urban Outfitters | Abercrombie Fitch vs. Foot Locker | Abercrombie Fitch vs. Childrens Place | Abercrombie Fitch vs. American Eagle Outfitters |
| GPS Old vs. Abercrombie Fitch | GPS Old vs. Urban Outfitters | GPS Old vs. Foot Locker | GPS Old vs. Childrens Place |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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