Correlation Between Solo Brands and Vista Outdoor
Can any of the company-specific risk be diversified away by investing in both Solo Brands and Vista Outdoor 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 Solo Brands and Vista Outdoor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solo Brands and Vista Outdoor, you can compare the effects of market volatilities on Solo Brands and Vista Outdoor 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 Solo Brands with a short position of Vista Outdoor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solo Brands and Vista Outdoor.
Diversification Opportunities for Solo Brands and Vista Outdoor
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Solo and Vista is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Solo Brands and Vista Outdoor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vista Outdoor and Solo 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 Solo Brands are associated (or correlated) with Vista Outdoor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vista Outdoor has no effect on the direction of Solo Brands i.e., Solo Brands and Vista Outdoor go up and down completely randomly.
Pair Corralation between Solo Brands and Vista Outdoor
Considering the 90-day investment horizon Solo Brands is expected to under-perform the Vista Outdoor. In addition to that, Solo Brands is 21.05 times more volatile than Vista Outdoor. It trades about -0.04 of its total potential returns per unit of risk. Vista Outdoor is currently generating about 0.06 per unit of volatility. If you would invest 4,411 in Vista Outdoor on August 24, 2024 and sell it today you would earn a total of 14.00 from holding Vista Outdoor or generate 0.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solo Brands vs. Vista Outdoor
Performance |
| Timeline |
| Solo Brands |
| Vista Outdoor |
Solo Brands and Vista Outdoor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solo Brands and Vista Outdoor
The main advantage of trading using opposite Solo Brands and Vista Outdoor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solo Brands position performs unexpectedly, Vista Outdoor 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 Vista Outdoor will offset losses from the drop in Vista Outdoor's long position.| Solo Brands vs. Qurate Retail Series | Solo Brands vs. Hour Loop | Solo Brands vs. 1StdibsCom | Solo Brands vs. Baozun Inc |
| Vista Outdoor vs. Clarus Corp | Vista Outdoor vs. Johnson Outdoors | Vista Outdoor vs. Escalade Incorporated | Vista Outdoor vs. JAKKS Pacific |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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