Correlation Between Foot Locker and Duluth Holdings
Can any of the company-specific risk be diversified away by investing in both Foot Locker and Duluth Holdings 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 Foot Locker and Duluth Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Foot Locker and Duluth Holdings, you can compare the effects of market volatilities on Foot Locker and Duluth Holdings 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 Foot Locker with a short position of Duluth Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foot Locker and Duluth Holdings.
Diversification Opportunities for Foot Locker and Duluth Holdings
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Foot and Duluth is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Foot Locker and Duluth Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duluth Holdings and Foot Locker 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 Foot Locker are associated (or correlated) with Duluth Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duluth Holdings has no effect on the direction of Foot Locker i.e., Foot Locker and Duluth Holdings go up and down completely randomly.
Pair Corralation between Foot Locker and Duluth Holdings
Allowing for the 90-day total investment horizon Foot Locker is expected to generate 0.74 times more return on investment than Duluth Holdings. However, Foot Locker is 1.35 times less risky than Duluth Holdings. It trades about 0.2 of its potential returns per unit of risk. Duluth Holdings is currently generating about 0.13 per unit of risk. If you would invest 2,294 in Foot Locker on August 31, 2024 and sell it today you would earn a total of 237.00 from holding Foot Locker or generate 10.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Foot Locker vs. Duluth Holdings
Performance |
| Timeline |
| Foot Locker |
| Duluth Holdings |
Foot Locker and Duluth Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Foot Locker and Duluth Holdings
The main advantage of trading using opposite Foot Locker and Duluth Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foot Locker position performs unexpectedly, Duluth Holdings 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 Duluth Holdings will offset losses from the drop in Duluth Holdings' long position.| Foot Locker vs. Abercrombie Fitch | Foot Locker vs. Urban Outfitters | Foot Locker vs. Childrens Place | Foot Locker vs. American Eagle Outfitters |
| Duluth Holdings vs. Zumiez Inc | Duluth Holdings vs. JJill Inc | Duluth Holdings vs. Shoe Carnival | Duluth Holdings vs. Cato Corporation |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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