Correlation Between Aterian and Fossil
Can any of the company-specific risk be diversified away by investing in both Aterian and Fossil 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 Aterian and Fossil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aterian and Fossil Group, you can compare the effects of market volatilities on Aterian and Fossil 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 Aterian with a short position of Fossil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aterian and Fossil.
Diversification Opportunities for Aterian and Fossil
Excellent diversification
The 3 months correlation between Aterian and Fossil is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Aterian and Fossil Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fossil Group and Aterian 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 Aterian are associated (or correlated) with Fossil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fossil Group has no effect on the direction of Aterian i.e., Aterian and Fossil go up and down completely randomly.
Pair Corralation between Aterian and Fossil
Given the investment horizon of 90 days Aterian is expected to generate 17.28 times less return on investment than Fossil. In addition to that, Aterian is 1.08 times more volatile than Fossil Group. It trades about 0.0 of its total potential returns per unit of risk. Fossil Group is currently generating about 0.03 per unit of volatility. If you would invest 131.00 in Fossil Group on September 2, 2024 and sell it today you would earn a total of 15.00 from holding Fossil Group or generate 11.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aterian vs. Fossil Group
Performance |
| Timeline |
| Aterian |
| Fossil Group |
Aterian and Fossil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aterian and Fossil
The main advantage of trading using opposite Aterian and Fossil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aterian position performs unexpectedly, Fossil 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 Fossil will offset losses from the drop in Fossil's long position.| Aterian vs. Energy Focu | Aterian vs. Flexsteel Industries | Aterian vs. Ethan Allen Interiors | Aterian vs. FGI Industries |
| Fossil vs. Lanvin Group Holdings | Fossil vs. Signet Jewelers | Fossil vs. Tapestry | Fossil vs. Capri 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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