Correlation Between Designer Brands and Birkenstock Holding
Can any of the company-specific risk be diversified away by investing in both Designer Brands and Birkenstock Holding 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 Birkenstock Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Designer Brands and Birkenstock Holding plc, you can compare the effects of market volatilities on Designer Brands and Birkenstock Holding 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 Birkenstock Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Designer Brands and Birkenstock Holding.
Diversification Opportunities for Designer Brands and Birkenstock Holding
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Designer and Birkenstock is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Designer Brands and Birkenstock Holding plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Birkenstock Holding plc 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 Birkenstock Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Birkenstock Holding plc has no effect on the direction of Designer Brands i.e., Designer Brands and Birkenstock Holding go up and down completely randomly.
Pair Corralation between Designer Brands and Birkenstock Holding
If you would invest (100.00) in Birkenstock Holding plc on September 12, 2024 and sell it today you would earn a total of 100.00 from holding Birkenstock Holding plc or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.0% |
| Values | Daily Returns |
Designer Brands vs. Birkenstock Holding plc
Performance |
| Timeline |
| Designer Brands |
| Birkenstock Holding plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Designer Brands and Birkenstock Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Designer Brands and Birkenstock Holding
The main advantage of trading using opposite Designer Brands and Birkenstock Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Designer Brands position performs unexpectedly, Birkenstock Holding 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 Birkenstock Holding will offset losses from the drop in Birkenstock Holding's long position.| Designer Brands vs. Wolverine World Wide | Designer Brands vs. Weyco Group | Designer Brands vs. Steven Madden | Designer Brands vs. Rocky Brands |
| Birkenstock Holding vs. Citi Trends | Birkenstock Holding vs. Stratasys | Birkenstock Holding vs. Steven Madden | Birkenstock Holding vs. Anterix |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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