Correlation Between H M and RYU Apparel
Can any of the company-specific risk be diversified away by investing in both H M and RYU Apparel 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 RYU Apparel 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 RYU Apparel, you can compare the effects of market volatilities on H M and RYU Apparel 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 RYU Apparel. Check out your portfolio center. Please also check ongoing floating volatility patterns of H M and RYU Apparel.
Diversification Opportunities for H M and RYU Apparel
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between HNNMY and RYU is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding H M Hennes and RYU Apparel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RYU Apparel 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 RYU Apparel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RYU Apparel has no effect on the direction of H M i.e., H M and RYU Apparel go up and down completely randomly.
Pair Corralation between H M and RYU Apparel
Assuming the 90 days horizon H M is expected to generate 5.55 times less return on investment than RYU Apparel. But when comparing it to its historical volatility, H M Hennes is 7.18 times less risky than RYU Apparel. It trades about 0.03 of its potential returns per unit of risk. RYU Apparel is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1.50 in RYU Apparel on August 23, 2024 and sell it today you would lose (0.84) from holding RYU Apparel or give up 56.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 17.58% |
| Values | Daily Returns |
H M Hennes vs. RYU Apparel
Performance |
| Timeline |
| H M Hennes |
| RYU Apparel |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
H M and RYU Apparel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with H M and RYU Apparel
The main advantage of trading using opposite H M and RYU Apparel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H M position performs unexpectedly, RYU Apparel 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 RYU Apparel will offset losses from the drop in RYU Apparel's 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 |
| RYU Apparel vs. H M Hennes | RYU Apparel vs. Xcel Brands | RYU Apparel vs. Oxford Industries | RYU Apparel vs. H M Hennes |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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