Correlation Between Destination and Buckle
Can any of the company-specific risk be diversified away by investing in both Destination 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 Destination and Buckle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Destination XL Group and Buckle Inc, you can compare the effects of market volatilities on Destination 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 Destination with a short position of Buckle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Destination and Buckle.
Diversification Opportunities for Destination and Buckle
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Destination and Buckle is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Destination XL Group and Buckle Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Buckle Inc and Destination 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 Destination XL Group 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 Destination i.e., Destination and Buckle go up and down completely randomly.
Pair Corralation between Destination and Buckle
Given the investment horizon of 90 days Destination XL Group is expected to generate 2.36 times more return on investment than Buckle. However, Destination is 2.36 times more volatile than Buckle Inc. It trades about -0.13 of its potential returns per unit of risk. Buckle Inc is currently generating about -0.38 per unit of risk. If you would invest 276.00 in Destination XL Group on November 18, 2024 and sell it today you would lose (27.00) from holding Destination XL Group or give up 9.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Destination XL Group vs. Buckle Inc
Performance |
| Timeline |
| Destination XL Group |
| Buckle Inc |
Destination and Buckle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Destination and Buckle
The main advantage of trading using opposite Destination and Buckle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Destination 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.| Destination vs. Cato Corporation | Destination vs. Zumiez Inc | Destination vs. Tillys Inc | Destination vs. Duluth Holdings |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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