Correlation Between Torrid Holdings and AKA Brands
Can any of the company-specific risk be diversified away by investing in both Torrid Holdings and AKA Brands 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 Torrid Holdings and AKA Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Torrid Holdings and AKA Brands Holding, you can compare the effects of market volatilities on Torrid Holdings and AKA Brands 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 Torrid Holdings with a short position of AKA Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Torrid Holdings and AKA Brands.
Diversification Opportunities for Torrid Holdings and AKA Brands
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Torrid and AKA is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Torrid Holdings and AKA Brands Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AKA Brands Holding and Torrid Holdings 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 Torrid Holdings are associated (or correlated) with AKA Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AKA Brands Holding has no effect on the direction of Torrid Holdings i.e., Torrid Holdings and AKA Brands go up and down completely randomly.
Pair Corralation between Torrid Holdings and AKA Brands
Given the investment horizon of 90 days Torrid Holdings is expected to generate 0.52 times more return on investment than AKA Brands. However, Torrid Holdings is 1.93 times less risky than AKA Brands. It trades about 0.3 of its potential returns per unit of risk. AKA Brands Holding is currently generating about -0.12 per unit of risk. If you would invest 350.00 in Torrid Holdings on August 28, 2024 and sell it today you would earn a total of 66.00 from holding Torrid Holdings or generate 18.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Torrid Holdings vs. AKA Brands Holding
Performance |
| Timeline |
| Torrid Holdings |
| AKA Brands Holding |
Torrid Holdings and AKA Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Torrid Holdings and AKA Brands
The main advantage of trading using opposite Torrid Holdings and AKA Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Torrid Holdings position performs unexpectedly, AKA Brands 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 AKA Brands will offset losses from the drop in AKA Brands' long position.| Torrid Holdings vs. Cato Corporation | Torrid Holdings vs. Shoe Carnival | Torrid Holdings vs. Genesco | Torrid Holdings vs. Zumiez Inc |
| AKA Brands vs. Brilliant Earth Group | AKA Brands vs. Lulus Fashion Lounge | AKA Brands vs. Torrid Holdings | AKA Brands vs. Aveanna Healthcare 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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