Correlation Between Designer Brands and Amexdrug
Can any of the company-specific risk be diversified away by investing in both Designer Brands and Amexdrug 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 Designer Brands and Amexdrug into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Designer Brands and Amexdrug, you can compare the effects of market volatilities on Designer Brands and Amexdrug 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 Designer Brands with a short position of Amexdrug. Check out your portfolio center. Please also check ongoing floating volatility patterns of Designer Brands and Amexdrug.
Diversification Opportunities for Designer Brands and Amexdrug
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Designer and Amexdrug is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Designer Brands and Amexdrug in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amexdrug and Designer Brands 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 Designer Brands are associated (or correlated) with Amexdrug. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amexdrug has no effect on the direction of Designer Brands i.e., Designer Brands and Amexdrug go up and down completely randomly.
Pair Corralation between Designer Brands and Amexdrug
Considering the 90-day investment horizon Designer Brands is expected to under-perform the Amexdrug. But the stock apears to be less risky and, when comparing its historical volatility, Designer Brands is 8.11 times less risky than Amexdrug. The stock trades about 0.0 of its potential returns per unit of risk. The Amexdrug is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Amexdrug on September 4, 2024 and sell it today you would lose (16.80) from holding Amexdrug or give up 98.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Designer Brands vs. Amexdrug
Performance |
| Timeline |
| Designer Brands |
| Amexdrug |
Designer Brands and Amexdrug Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Designer Brands and Amexdrug
The main advantage of trading using opposite Designer Brands and Amexdrug positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Designer Brands position performs unexpectedly, Amexdrug 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 Amexdrug will offset losses from the drop in Amexdrug's long position.| Designer Brands vs. Wolverine World Wide | Designer Brands vs. Weyco Group | Designer Brands vs. Steven Madden | Designer Brands vs. Rocky Brands |
| Amexdrug vs. Snap On | Amexdrug vs. Mannatech Incorporated | Amexdrug vs. Designer Brands | Amexdrug vs. Casio Computer Co |
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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