Correlation Between Canada Goose and Kontoor Brands
Can any of the company-specific risk be diversified away by investing in both Canada Goose and Kontoor Brands 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 Canada Goose and Kontoor Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canada Goose Holdings and Kontoor Brands, you can compare the effects of market volatilities on Canada Goose and Kontoor Brands 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 Canada Goose with a short position of Kontoor Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canada Goose and Kontoor Brands.
Diversification Opportunities for Canada Goose and Kontoor Brands
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Canada and Kontoor is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Canada Goose Holdings and Kontoor Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kontoor Brands and Canada Goose 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 Canada Goose Holdings are associated (or correlated) with Kontoor Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kontoor Brands has no effect on the direction of Canada Goose i.e., Canada Goose and Kontoor Brands go up and down completely randomly.
Pair Corralation between Canada Goose and Kontoor Brands
Given the investment horizon of 90 days Canada Goose Holdings is expected to under-perform the Kontoor Brands. In addition to that, Canada Goose is 1.29 times more volatile than Kontoor Brands. It trades about -0.11 of its total potential returns per unit of risk. Kontoor Brands is currently generating about 0.1 per unit of volatility. If you would invest 7,050 in Kontoor Brands on August 24, 2024 and sell it today you would earn a total of 1,735 from holding Kontoor Brands or generate 24.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canada Goose Holdings vs. Kontoor Brands
Performance |
| Timeline |
| Canada Goose Holdings |
| Kontoor Brands |
Canada Goose and Kontoor Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canada Goose and Kontoor Brands
The main advantage of trading using opposite Canada Goose and Kontoor Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canada Goose position performs unexpectedly, Kontoor Brands 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 Kontoor Brands will offset losses from the drop in Kontoor Brands' long position.| Canada Goose vs. Columbia Sportswear | Canada Goose vs. Levi Strauss Co | Canada Goose vs. Hanesbrands | Canada Goose vs. Under Armour C |
| Kontoor Brands vs. Columbia Sportswear | Kontoor Brands vs. Levi Strauss Co | Kontoor Brands vs. Hanesbrands | Kontoor Brands vs. Under Armour C |
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 Stocks Directory module to find actively traded stocks across global markets.
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