Correlation Between Ethan Allen and Victorias Secret
Can any of the company-specific risk be diversified away by investing in both Ethan Allen and Victorias Secret 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 Ethan Allen and Victorias Secret into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ethan Allen Interiors and Victorias Secret Co, you can compare the effects of market volatilities on Ethan Allen and Victorias Secret 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 Ethan Allen with a short position of Victorias Secret. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ethan Allen and Victorias Secret.
Diversification Opportunities for Ethan Allen and Victorias Secret
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ethan and Victorias is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Ethan Allen Interiors and Victorias Secret Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victorias Secret and Ethan Allen 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 Ethan Allen Interiors are associated (or correlated) with Victorias Secret. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victorias Secret has no effect on the direction of Ethan Allen i.e., Ethan Allen and Victorias Secret go up and down completely randomly.
Pair Corralation between Ethan Allen and Victorias Secret
Considering the 90-day investment horizon Ethan Allen Interiors is expected to generate 0.53 times more return on investment than Victorias Secret. However, Ethan Allen Interiors is 1.88 times less risky than Victorias Secret. It trades about 0.04 of its potential returns per unit of risk. Victorias Secret Co is currently generating about 0.01 per unit of risk. If you would invest 2,314 in Ethan Allen Interiors on August 26, 2024 and sell it today you would earn a total of 679.00 from holding Ethan Allen Interiors or generate 29.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ethan Allen Interiors vs. Victorias Secret Co
Performance |
| Timeline |
| Ethan Allen Interiors |
| Victorias Secret |
Ethan Allen and Victorias Secret Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ethan Allen and Victorias Secret
The main advantage of trading using opposite Ethan Allen and Victorias Secret positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ethan Allen position performs unexpectedly, Victorias Secret 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 Victorias Secret will offset losses from the drop in Victorias Secret's long position.| Ethan Allen vs. Hooker Furniture | Ethan Allen vs. Willis Lease Finance | Ethan Allen vs. Rocky Brands | Ethan Allen vs. First Business Financial |
| Victorias Secret vs. Ross Stores | Victorias Secret vs. Childrens Place | Victorias Secret vs. Buckle Inc | Victorias Secret vs. Guess Inc |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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