Correlation Between Canada Goose and Zumiez
Can any of the company-specific risk be diversified away by investing in both Canada Goose and Zumiez 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 Zumiez 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 Zumiez Inc, you can compare the effects of market volatilities on Canada Goose and Zumiez 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 Zumiez. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canada Goose and Zumiez.
Diversification Opportunities for Canada Goose and Zumiez
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Canada and Zumiez is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Canada Goose Holdings and Zumiez Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zumiez Inc 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 Zumiez. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zumiez Inc has no effect on the direction of Canada Goose i.e., Canada Goose and Zumiez go up and down completely randomly.
Pair Corralation between Canada Goose and Zumiez
Given the investment horizon of 90 days Canada Goose Holdings is expected to under-perform the Zumiez. But the stock apears to be less risky and, when comparing its historical volatility, Canada Goose Holdings is 1.22 times less risky than Zumiez. The stock trades about -0.07 of its potential returns per unit of risk. The Zumiez Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,808 in Zumiez Inc on September 12, 2024 and sell it today you would earn a total of 369.00 from holding Zumiez Inc or generate 20.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canada Goose Holdings vs. Zumiez Inc
Performance |
| Timeline |
| Canada Goose Holdings |
| Zumiez Inc |
Canada Goose and Zumiez Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canada Goose and Zumiez
The main advantage of trading using opposite Canada Goose and Zumiez positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canada Goose position performs unexpectedly, Zumiez 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 Zumiez will offset losses from the drop in Zumiez's long position.| Canada Goose vs. J Long Group Limited | Canada Goose vs. Under Armour C | Canada Goose vs. Vince Holding Corp | Canada Goose vs. Figs 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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