Correlation Between Hugo Boss and Ralph Lauren
Can any of the company-specific risk be diversified away by investing in both Hugo Boss and Ralph Lauren 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 Hugo Boss and Ralph Lauren into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hugo Boss AG and Ralph Lauren Corp, you can compare the effects of market volatilities on Hugo Boss and Ralph Lauren 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 Hugo Boss with a short position of Ralph Lauren. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hugo Boss and Ralph Lauren.
Diversification Opportunities for Hugo Boss and Ralph Lauren
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hugo and Ralph is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Hugo Boss AG and Ralph Lauren Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ralph Lauren Corp and Hugo Boss 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 Hugo Boss AG are associated (or correlated) with Ralph Lauren. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ralph Lauren Corp has no effect on the direction of Hugo Boss i.e., Hugo Boss and Ralph Lauren go up and down completely randomly.
Pair Corralation between Hugo Boss and Ralph Lauren
Assuming the 90 days horizon Hugo Boss is expected to generate 1.43 times less return on investment than Ralph Lauren. In addition to that, Hugo Boss is 2.74 times more volatile than Ralph Lauren Corp. It trades about 0.06 of its total potential returns per unit of risk. Ralph Lauren Corp is currently generating about 0.23 per unit of volatility. If you would invest 20,959 in Ralph Lauren Corp on September 13, 2024 and sell it today you would earn a total of 1,647 from holding Ralph Lauren Corp or generate 7.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hugo Boss AG vs. Ralph Lauren Corp
Performance |
| Timeline |
| Hugo Boss AG |
| Ralph Lauren Corp |
Hugo Boss and Ralph Lauren Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hugo Boss and Ralph Lauren
The main advantage of trading using opposite Hugo Boss and Ralph Lauren positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hugo Boss position performs unexpectedly, Ralph Lauren 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 Ralph Lauren will offset losses from the drop in Ralph Lauren's long position.| Hugo Boss vs. VF Corporation | Hugo Boss vs. Levi Strauss Co | Hugo Boss vs. Under Armour C | Hugo Boss vs. Under Armour A |
| Ralph Lauren vs. Columbia Sportswear | Ralph Lauren vs. Kontoor Brands | Ralph Lauren vs. Levi Strauss Co | Ralph Lauren vs. G III Apparel Group |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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