Correlation Between Genesco and Duluth Holdings
Can any of the company-specific risk be diversified away by investing in both Genesco 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 Genesco and Duluth Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genesco and Duluth Holdings, you can compare the effects of market volatilities on Genesco 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 Genesco with a short position of Duluth Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genesco and Duluth Holdings.
Diversification Opportunities for Genesco and Duluth Holdings
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Genesco and Duluth is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Genesco and Duluth Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duluth Holdings and Genesco 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 Genesco 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 Genesco i.e., Genesco and Duluth Holdings go up and down completely randomly.
Pair Corralation between Genesco and Duluth Holdings
Considering the 90-day investment horizon Genesco is expected to generate 1.24 times more return on investment than Duluth Holdings. However, Genesco is 1.24 times more volatile than Duluth Holdings. It trades about 0.02 of its potential returns per unit of risk. Duluth Holdings is currently generating about -0.04 per unit of risk. If you would invest 3,136 in Genesco on August 27, 2024 and sell it today you would earn a total of 24.00 from holding Genesco or generate 0.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genesco vs. Duluth Holdings
Performance |
| Timeline |
| Genesco |
| Duluth Holdings |
Genesco and Duluth Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genesco and Duluth Holdings
The main advantage of trading using opposite Genesco and Duluth Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genesco 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.The idea behind Genesco and Duluth Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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