Correlation Between Dillards Capital and Kohls Corp
Can any of the company-specific risk be diversified away by investing in both Dillards Capital and Kohls Corp 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 Dillards Capital and Kohls Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dillards Capital Trust and Kohls Corp, you can compare the effects of market volatilities on Dillards Capital and Kohls Corp 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 Dillards Capital with a short position of Kohls Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dillards Capital and Kohls Corp.
Diversification Opportunities for Dillards Capital and Kohls Corp
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dillards and Kohls is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Dillards Capital Trust and Kohls Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kohls Corp and Dillards Capital 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 Dillards Capital Trust are associated (or correlated) with Kohls Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kohls Corp has no effect on the direction of Dillards Capital i.e., Dillards Capital and Kohls Corp go up and down completely randomly.
Pair Corralation between Dillards Capital and Kohls Corp
Considering the 90-day investment horizon Dillards Capital Trust is expected to generate 0.14 times more return on investment than Kohls Corp. However, Dillards Capital Trust is 7.06 times less risky than Kohls Corp. It trades about 0.07 of its potential returns per unit of risk. Kohls Corp is currently generating about -0.01 per unit of risk. If you would invest 2,190 in Dillards Capital Trust on August 24, 2024 and sell it today you would earn a total of 386.00 from holding Dillards Capital Trust or generate 17.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dillards Capital Trust vs. Kohls Corp
Performance |
| Timeline |
| Dillards Capital Trust |
| Kohls Corp |
Dillards Capital and Kohls Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dillards Capital and Kohls Corp
The main advantage of trading using opposite Dillards Capital and Kohls Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dillards Capital position performs unexpectedly, Kohls Corp 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 Kohls Corp will offset losses from the drop in Kohls Corp's long position.| Dillards Capital vs. Prudential Financial 4125 | Dillards Capital vs. Credit Enhanced Corts | Dillards Capital vs. Strats Trust Cellular | Dillards Capital vs. Structured Products Corp |
| Kohls Corp vs. Nordstrom | Kohls Corp vs. Dillards | Kohls Corp vs. Marks Spencer Group | Kohls Corp vs. Marks and Spencer |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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