Correlation Between H+M HEN+MAUUNSPADR and VF
Can any of the company-specific risk be diversified away by investing in both H+M HEN+MAUUNSPADR and VF 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 HEN+MAUUNSPADR and VF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HM HENMAUUNSPADR 15 and VF Corporation, you can compare the effects of market volatilities on H+M HEN+MAUUNSPADR and VF 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 HEN+MAUUNSPADR with a short position of VF. Check out your portfolio center. Please also check ongoing floating volatility patterns of H+M HEN+MAUUNSPADR and VF.
Diversification Opportunities for H+M HEN+MAUUNSPADR and VF
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between H+M and VF is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding HM HENMAUUNSPADR 15 and VF Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VF Corporation and H+M HEN+MAUUNSPADR 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 HM HENMAUUNSPADR 15 are associated (or correlated) with VF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VF Corporation has no effect on the direction of H+M HEN+MAUUNSPADR i.e., H+M HEN+MAUUNSPADR and VF go up and down completely randomly.
Pair Corralation between H+M HEN+MAUUNSPADR and VF
Assuming the 90 days trading horizon HM HENMAUUNSPADR 15 is expected to under-perform the VF. But the stock apears to be less risky and, when comparing its historical volatility, HM HENMAUUNSPADR 15 is 1.67 times less risky than VF. The stock trades about -0.18 of its potential returns per unit of risk. The VF Corporation is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,895 in VF Corporation on August 28, 2024 and sell it today you would earn a total of 8.00 from holding VF Corporation or generate 0.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HM HENMAUUNSPADR 15 vs. VF Corp.
Performance |
| Timeline |
| H+M HEN+MAUUNSPADR |
| VF Corporation |
H+M HEN+MAUUNSPADR and VF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with H+M HEN+MAUUNSPADR and VF
The main advantage of trading using opposite H+M HEN+MAUUNSPADR and VF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H+M HEN+MAUUNSPADR position performs unexpectedly, VF 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 VF will offset losses from the drop in VF's long position.| H+M HEN+MAUUNSPADR vs. Moncler SpA | H+M HEN+MAUUNSPADR vs. Capri Holdings Limited | H+M HEN+MAUUNSPADR vs. Gildan Activewear |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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