Correlation Between Abercrombie Fitch and Reitmans (Canada)
Can any of the company-specific risk be diversified away by investing in both Abercrombie Fitch and Reitmans (Canada) 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 Reitmans (Canada) into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abercrombie Fitch and Reitmans Limited, you can compare the effects of market volatilities on Abercrombie Fitch and Reitmans (Canada) 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 Reitmans (Canada). Check out your portfolio center. Please also check ongoing floating volatility patterns of Abercrombie Fitch and Reitmans (Canada).
Diversification Opportunities for Abercrombie Fitch and Reitmans (Canada)
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Abercrombie and Reitmans is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Abercrombie Fitch and Reitmans Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reitmans (Canada) 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 Reitmans (Canada). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reitmans (Canada) has no effect on the direction of Abercrombie Fitch i.e., Abercrombie Fitch and Reitmans (Canada) go up and down completely randomly.
Pair Corralation between Abercrombie Fitch and Reitmans (Canada)
Considering the 90-day investment horizon Abercrombie Fitch is expected to generate 8.65 times more return on investment than Reitmans (Canada). However, Abercrombie Fitch is 8.65 times more volatile than Reitmans Limited. It trades about 0.13 of its potential returns per unit of risk. Reitmans Limited is currently generating about 0.21 per unit of risk. If you would invest 14,153 in Abercrombie Fitch on August 26, 2024 and sell it today you would earn a total of 1,046 from holding Abercrombie Fitch or generate 7.39% 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. Reitmans Limited
Performance |
| Timeline |
| Abercrombie Fitch |
| Reitmans (Canada) |
Abercrombie Fitch and Reitmans (Canada) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abercrombie Fitch and Reitmans (Canada)
The main advantage of trading using opposite Abercrombie Fitch and Reitmans (Canada) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abercrombie Fitch position performs unexpectedly, Reitmans (Canada) 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 Reitmans (Canada) will offset losses from the drop in Reitmans (Canada)'s long position.| Abercrombie Fitch vs. Urban Outfitters | Abercrombie Fitch vs. Foot Locker | Abercrombie Fitch vs. Childrens Place | Abercrombie Fitch vs. American Eagle Outfitters |
| Reitmans (Canada) vs. NEXT plc | Reitmans (Canada) vs. Reitmans Limited | Reitmans (Canada) vs. Lulus Fashion Lounge | Reitmans (Canada) vs. Duluth 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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