Correlation Between H M and Oxford Industries
Can any of the company-specific risk be diversified away by investing in both H M and Oxford Industries 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 H M and Oxford Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between H M Hennes and Oxford Industries, you can compare the effects of market volatilities on H M and Oxford Industries 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 H M with a short position of Oxford Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of H M and Oxford Industries.
Diversification Opportunities for H M and Oxford Industries
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between HMRZF and Oxford is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding H M Hennes and Oxford Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxford Industries and H M 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 H M Hennes are associated (or correlated) with Oxford Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxford Industries has no effect on the direction of H M i.e., H M and Oxford Industries go up and down completely randomly.
Pair Corralation between H M and Oxford Industries
Assuming the 90 days horizon H M Hennes is expected to generate 1.46 times more return on investment than Oxford Industries. However, H M is 1.46 times more volatile than Oxford Industries. It trades about 0.04 of its potential returns per unit of risk. Oxford Industries is currently generating about -0.03 per unit of risk. If you would invest 1,129 in H M Hennes on August 23, 2024 and sell it today you would earn a total of 266.00 from holding H M Hennes or generate 23.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 67.14% |
| Values | Daily Returns |
H M Hennes vs. Oxford Industries
Performance |
| Timeline |
| H M Hennes |
| Oxford Industries |
H M and Oxford Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with H M and Oxford Industries
The main advantage of trading using opposite H M and Oxford Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H M position performs unexpectedly, Oxford Industries 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 Oxford Industries will offset losses from the drop in Oxford Industries' long position.| H M vs. Superior Uniform Group | H M vs. Lakeland Industries | H M vs. Jerash Holdings | H M vs. G III Apparel Group |
| Oxford Industries vs. Columbia Sportswear | Oxford Industries vs. Levi Strauss Co | Oxford Industries vs. Hanesbrands | Oxford Industries 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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