Correlation Between Designer Brands and Buckle
Can any of the company-specific risk be diversified away by investing in both Designer Brands and Buckle 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 Buckle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Designer Brands and Buckle Inc, you can compare the effects of market volatilities on Designer Brands and Buckle 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 Buckle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Designer Brands and Buckle.
Diversification Opportunities for Designer Brands and Buckle
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Designer and Buckle is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Designer Brands and Buckle Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Buckle Inc 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 Buckle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Buckle Inc has no effect on the direction of Designer Brands i.e., Designer Brands and Buckle go up and down completely randomly.
Pair Corralation between Designer Brands and Buckle
Considering the 90-day investment horizon Designer Brands is expected to under-perform the Buckle. In addition to that, Designer Brands is 2.13 times more volatile than Buckle Inc. It trades about -0.05 of its total potential returns per unit of risk. Buckle Inc is currently generating about 0.08 per unit of volatility. If you would invest 3,509 in Buckle Inc on August 26, 2024 and sell it today you would earn a total of 1,377 from holding Buckle Inc or generate 39.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Designer Brands vs. Buckle Inc
Performance |
| Timeline |
| Designer Brands |
| Buckle Inc |
Designer Brands and Buckle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Designer Brands and Buckle
The main advantage of trading using opposite Designer Brands and Buckle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Designer Brands position performs unexpectedly, Buckle 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 Buckle will offset losses from the drop in Buckle's long position.| Designer Brands vs. Wolverine World Wide | Designer Brands vs. Weyco Group | Designer Brands vs. Steven Madden | Designer Brands vs. Rocky Brands |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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