Correlation Between Aritzia and Industria
Can any of the company-specific risk be diversified away by investing in both Aritzia and Industria 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 Aritzia and Industria into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aritzia and Industria de Diseo, you can compare the effects of market volatilities on Aritzia and Industria 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 Aritzia with a short position of Industria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aritzia and Industria.
Diversification Opportunities for Aritzia and Industria
Excellent diversification
The 3 months correlation between Aritzia and Industria is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Aritzia and Industria de Diseo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industria de Diseo and Aritzia 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 Aritzia are associated (or correlated) with Industria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industria de Diseo has no effect on the direction of Aritzia i.e., Aritzia and Industria go up and down completely randomly.
Pair Corralation between Aritzia and Industria
Assuming the 90 days horizon Aritzia is expected to generate 1.51 times more return on investment than Industria. However, Aritzia is 1.51 times more volatile than Industria de Diseo. It trades about 0.3 of its potential returns per unit of risk. Industria de Diseo is currently generating about -0.02 per unit of risk. If you would invest 3,696 in Aritzia on October 22, 2024 and sell it today you would earn a total of 1,004 from holding Aritzia or generate 27.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aritzia vs. Industria de Diseo
Performance |
| Timeline |
| Aritzia |
| Industria de Diseo |
Aritzia and Industria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aritzia and Industria
The main advantage of trading using opposite Aritzia and Industria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aritzia position performs unexpectedly, Industria 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 Industria will offset losses from the drop in Industria's long position.| Aritzia vs. Fast Retailing Co | Aritzia vs. Industria de Diseno | Aritzia vs. Shoe Carnival | Aritzia vs. Genesco |
| Industria vs. Fast Retailing Co | Industria vs. The TJX Companies | Industria vs. Ross Stores | Industria vs. Urban Outfitters |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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