Correlation Between Designer Brands and Naas Technology
Can any of the company-specific risk be diversified away by investing in both Designer Brands and Naas Technology 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 Naas Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Designer Brands and Naas Technology ADR, you can compare the effects of market volatilities on Designer Brands and Naas Technology 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 Naas Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Designer Brands and Naas Technology.
Diversification Opportunities for Designer Brands and Naas Technology
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Designer and Naas is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Designer Brands and Naas Technology ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naas Technology ADR 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 Naas Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naas Technology ADR has no effect on the direction of Designer Brands i.e., Designer Brands and Naas Technology go up and down completely randomly.
Pair Corralation between Designer Brands and Naas Technology
Considering the 90-day investment horizon Designer Brands is expected to generate 0.45 times more return on investment than Naas Technology. However, Designer Brands is 2.25 times less risky than Naas Technology. It trades about -0.01 of its potential returns per unit of risk. Naas Technology ADR is currently generating about -0.06 per unit of risk. If you would invest 890.00 in Designer Brands on September 4, 2024 and sell it today you would lose (338.00) from holding Designer Brands or give up 37.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Designer Brands vs. Naas Technology ADR
Performance |
| Timeline |
| Designer Brands |
| Naas Technology ADR |
Designer Brands and Naas Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Designer Brands and Naas Technology
The main advantage of trading using opposite Designer Brands and Naas Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Designer Brands position performs unexpectedly, Naas Technology 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 Naas Technology will offset losses from the drop in Naas Technology's long position.| Designer Brands vs. Wolverine World Wide | Designer Brands vs. Weyco Group | Designer Brands vs. Steven Madden | Designer Brands vs. Rocky Brands |
| Naas Technology vs. Leslies | Naas Technology vs. Sally Beauty Holdings | Naas Technology vs. ODP Corp | Naas Technology vs. 1 800 FLOWERSCOM |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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