Correlation Between Fossil and MYT Netherlands
Can any of the company-specific risk be diversified away by investing in both Fossil and MYT Netherlands 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 Fossil and MYT Netherlands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fossil Group and MYT Netherlands Parent, you can compare the effects of market volatilities on Fossil and MYT Netherlands 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 Fossil with a short position of MYT Netherlands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fossil and MYT Netherlands.
Diversification Opportunities for Fossil and MYT Netherlands
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fossil and MYT is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Fossil Group and MYT Netherlands Parent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MYT Netherlands Parent and Fossil 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 Fossil Group are associated (or correlated) with MYT Netherlands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MYT Netherlands Parent has no effect on the direction of Fossil i.e., Fossil and MYT Netherlands go up and down completely randomly.
Pair Corralation between Fossil and MYT Netherlands
Given the investment horizon of 90 days Fossil is expected to generate 3.19 times less return on investment than MYT Netherlands. But when comparing it to its historical volatility, Fossil Group is 1.13 times less risky than MYT Netherlands. It trades about 0.03 of its potential returns per unit of risk. MYT Netherlands Parent is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 310.00 in MYT Netherlands Parent on August 26, 2024 and sell it today you would earn a total of 390.00 from holding MYT Netherlands Parent or generate 125.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fossil Group vs. MYT Netherlands Parent
Performance |
| Timeline |
| Fossil Group |
| MYT Netherlands Parent |
Fossil and MYT Netherlands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fossil and MYT Netherlands
The main advantage of trading using opposite Fossil and MYT Netherlands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fossil position performs unexpectedly, MYT Netherlands 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 MYT Netherlands will offset losses from the drop in MYT Netherlands' long position.| Fossil vs. Lanvin Group Holdings | Fossil vs. Signet Jewelers | Fossil vs. Tapestry | Fossil vs. Capri Holdings |
| MYT Netherlands vs. VF Corporation | MYT Netherlands vs. Levi Strauss Co | MYT Netherlands vs. Under Armour A | MYT Netherlands vs. Oxford Industries |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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