Correlation Between Carters and Plby
Can any of the company-specific risk be diversified away by investing in both Carters and Plby 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 Carters and Plby into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carters and Plby Group, you can compare the effects of market volatilities on Carters and Plby 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 Carters with a short position of Plby. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carters and Plby.
Diversification Opportunities for Carters and Plby
Pay attention - limited upside
The 3 months correlation between Carters and Plby is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Carters and Plby Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plby Group and Carters 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 Carters are associated (or correlated) with Plby. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plby Group has no effect on the direction of Carters i.e., Carters and Plby go up and down completely randomly.
Pair Corralation between Carters and Plby
Considering the 90-day investment horizon Carters is expected to under-perform the Plby. But the stock apears to be less risky and, when comparing its historical volatility, Carters is 6.33 times less risky than Plby. The stock trades about -0.1 of its potential returns per unit of risk. The Plby Group is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 83.00 in Plby Group on August 27, 2024 and sell it today you would earn a total of 39.00 from holding Plby Group or generate 46.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carters vs. Plby Group
Performance |
| Timeline |
| Carters |
| Plby Group |
Carters and Plby Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carters and Plby
The main advantage of trading using opposite Carters and Plby positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carters position performs unexpectedly, Plby 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 Plby will offset losses from the drop in Plby's long position.| Carters vs. VF Corporation | Carters vs. Levi Strauss Co | Carters vs. Under Armour A | Carters vs. Oxford Industries |
| Plby vs. Purecycle Technologies Holdings | Plby vs. Dolphin Entertainment | Plby vs. Hall of Fame | Plby vs. Funko Inc |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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