Correlation Between Abercrombie Fitch and Childrens Place
Can any of the company-specific risk be diversified away by investing in both Abercrombie Fitch and Childrens Place 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 Childrens Place into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abercrombie Fitch and Childrens Place, you can compare the effects of market volatilities on Abercrombie Fitch and Childrens Place 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 Childrens Place. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abercrombie Fitch and Childrens Place.
Diversification Opportunities for Abercrombie Fitch and Childrens Place
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Abercrombie and Childrens is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Abercrombie Fitch and Childrens Place in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Childrens Place 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 Childrens Place. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Childrens Place has no effect on the direction of Abercrombie Fitch i.e., Abercrombie Fitch and Childrens Place go up and down completely randomly.
Pair Corralation between Abercrombie Fitch and Childrens Place
Considering the 90-day investment horizon Abercrombie Fitch is expected to generate 0.32 times more return on investment than Childrens Place. However, Abercrombie Fitch is 3.08 times less risky than Childrens Place. It trades about 0.12 of its potential returns per unit of risk. Childrens Place is currently generating about 0.03 per unit of risk. If you would invest 5,485 in Abercrombie Fitch on August 27, 2024 and sell it today you would earn a total of 9,714 from holding Abercrombie Fitch or generate 177.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abercrombie Fitch vs. Childrens Place
Performance |
| Timeline |
| Abercrombie Fitch |
| Childrens Place |
Abercrombie Fitch and Childrens Place Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abercrombie Fitch and Childrens Place
The main advantage of trading using opposite Abercrombie Fitch and Childrens Place positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abercrombie Fitch position performs unexpectedly, Childrens Place 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 Childrens Place will offset losses from the drop in Childrens Place's long position.| Abercrombie Fitch vs. Urban Outfitters | Abercrombie Fitch vs. Foot Locker | Abercrombie Fitch vs. Childrens Place | Abercrombie Fitch vs. American Eagle Outfitters |
| Childrens Place vs. Ross Stores | Childrens Place vs. Buckle Inc | Childrens Place vs. Guess Inc | Childrens Place vs. Abercrombie Fitch |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |