Correlation Between Flexsteel Industries and Victorias Secret
Can any of the company-specific risk be diversified away by investing in both Flexsteel Industries 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 Flexsteel Industries and Victorias Secret into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flexsteel Industries and Victorias Secret Co, you can compare the effects of market volatilities on Flexsteel Industries 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 Flexsteel Industries with a short position of Victorias Secret. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flexsteel Industries and Victorias Secret.
Diversification Opportunities for Flexsteel Industries and Victorias Secret
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Flexsteel and Victorias is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Flexsteel Industries and Victorias Secret Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victorias Secret and Flexsteel Industries 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 Flexsteel Industries 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 Flexsteel Industries i.e., Flexsteel Industries and Victorias Secret go up and down completely randomly.
Pair Corralation between Flexsteel Industries and Victorias Secret
Given the investment horizon of 90 days Flexsteel Industries is expected to generate 10.64 times less return on investment than Victorias Secret. But when comparing it to its historical volatility, Flexsteel Industries is 1.24 times less risky than Victorias Secret. It trades about 0.05 of its potential returns per unit of risk. Victorias Secret Co is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 2,942 in Victorias Secret Co on August 29, 2024 and sell it today you would earn a total of 857.00 from holding Victorias Secret Co or generate 29.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flexsteel Industries vs. Victorias Secret Co
Performance |
| Timeline |
| Flexsteel Industries |
| Victorias Secret |
Flexsteel Industries and Victorias Secret Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flexsteel Industries and Victorias Secret
The main advantage of trading using opposite Flexsteel Industries and Victorias Secret positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flexsteel Industries 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.| Flexsteel Industries vs. Hooker Furniture | Flexsteel Industries vs. Bassett Furniture Industries | Flexsteel Industries vs. Willis Lease Finance | Flexsteel Industries vs. Rocky Brands |
| 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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