Correlation Between Duluth Holdings and Signet Jewelers
Can any of the company-specific risk be diversified away by investing in both Duluth Holdings and Signet Jewelers 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 Duluth Holdings and Signet Jewelers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Duluth Holdings and Signet Jewelers, you can compare the effects of market volatilities on Duluth Holdings and Signet Jewelers 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 Duluth Holdings with a short position of Signet Jewelers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duluth Holdings and Signet Jewelers.
Diversification Opportunities for Duluth Holdings and Signet Jewelers
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Duluth and Signet is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Duluth Holdings and Signet Jewelers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Signet Jewelers and Duluth Holdings 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 Duluth Holdings are associated (or correlated) with Signet Jewelers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Signet Jewelers has no effect on the direction of Duluth Holdings i.e., Duluth Holdings and Signet Jewelers go up and down completely randomly.
Pair Corralation between Duluth Holdings and Signet Jewelers
Given the investment horizon of 90 days Duluth Holdings is expected to generate 0.45 times more return on investment than Signet Jewelers. However, Duluth Holdings is 2.2 times less risky than Signet Jewelers. It trades about 0.08 of its potential returns per unit of risk. Signet Jewelers is currently generating about -0.21 per unit of risk. If you would invest 292.00 in Duluth Holdings on November 2, 2024 and sell it today you would earn a total of 9.00 from holding Duluth Holdings or generate 3.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Duluth Holdings vs. Signet Jewelers
Performance |
| Timeline |
| Duluth Holdings |
| Signet Jewelers |
Duluth Holdings and Signet Jewelers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duluth Holdings and Signet Jewelers
The main advantage of trading using opposite Duluth Holdings and Signet Jewelers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duluth Holdings position performs unexpectedly, Signet Jewelers 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 Signet Jewelers will offset losses from the drop in Signet Jewelers' long position.| Duluth Holdings vs. Zumiez Inc | Duluth Holdings vs. JJill Inc | Duluth Holdings vs. Shoe Carnival | Duluth Holdings vs. Cato Corporation |
| Signet Jewelers vs. Tapestry | Signet Jewelers vs. Movado Group | Signet Jewelers vs. Lanvin Group Holdings | Signet Jewelers vs. TheRealReal |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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