Correlation Between Buckle and Abercrombie Fitch
Can any of the company-specific risk be diversified away by investing in both Buckle and Abercrombie Fitch 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 Buckle and Abercrombie Fitch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Buckle Inc and Abercrombie Fitch, you can compare the effects of market volatilities on Buckle and Abercrombie Fitch 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 Buckle with a short position of Abercrombie Fitch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Buckle and Abercrombie Fitch.
Diversification Opportunities for Buckle and Abercrombie Fitch
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Buckle and Abercrombie is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Buckle Inc and Abercrombie Fitch in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abercrombie Fitch and Buckle 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 Buckle Inc are associated (or correlated) with Abercrombie Fitch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abercrombie Fitch has no effect on the direction of Buckle i.e., Buckle and Abercrombie Fitch go up and down completely randomly.
Pair Corralation between Buckle and Abercrombie Fitch
Considering the 90-day investment horizon Buckle Inc is expected to generate 0.72 times more return on investment than Abercrombie Fitch. However, Buckle Inc is 1.39 times less risky than Abercrombie Fitch. It trades about 0.42 of its potential returns per unit of risk. Abercrombie Fitch is currently generating about 0.21 per unit of risk. If you would invest 4,311 in Buckle Inc on August 28, 2024 and sell it today you would earn a total of 815.00 from holding Buckle Inc or generate 18.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Buckle Inc vs. Abercrombie Fitch
Performance |
| Timeline |
| Buckle Inc |
| Abercrombie Fitch |
Buckle and Abercrombie Fitch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Buckle and Abercrombie Fitch
The main advantage of trading using opposite Buckle and Abercrombie Fitch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Buckle position performs unexpectedly, Abercrombie Fitch 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 Abercrombie Fitch will offset losses from the drop in Abercrombie Fitch's long position.The idea behind Buckle Inc and Abercrombie Fitch pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Abercrombie Fitch vs. Urban Outfitters | Abercrombie Fitch vs. Foot Locker | Abercrombie Fitch vs. Childrens Place | Abercrombie Fitch vs. American Eagle 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |