Correlation Between Kontoor Brands and Duluth Holdings
Can any of the company-specific risk be diversified away by investing in both Kontoor Brands and Duluth Holdings 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 Kontoor Brands and Duluth Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kontoor Brands and Duluth Holdings, you can compare the effects of market volatilities on Kontoor Brands and Duluth Holdings 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 Kontoor Brands with a short position of Duluth Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kontoor Brands and Duluth Holdings.
Diversification Opportunities for Kontoor Brands and Duluth Holdings
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kontoor and Duluth is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Kontoor Brands and Duluth Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duluth Holdings and Kontoor Brands 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 Kontoor Brands are associated (or correlated) with Duluth Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duluth Holdings has no effect on the direction of Kontoor Brands i.e., Kontoor Brands and Duluth Holdings go up and down completely randomly.
Pair Corralation between Kontoor Brands and Duluth Holdings
Considering the 90-day investment horizon Kontoor Brands is expected to generate 1.0 times more return on investment than Duluth Holdings. However, Kontoor Brands is 1.0 times less risky than Duluth Holdings. It trades about 0.25 of its potential returns per unit of risk. Duluth Holdings is currently generating about 0.08 per unit of risk. If you would invest 7,706 in Kontoor Brands on August 30, 2024 and sell it today you would earn a total of 1,364 from holding Kontoor Brands or generate 17.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kontoor Brands vs. Duluth Holdings
Performance |
| Timeline |
| Kontoor Brands |
| Duluth Holdings |
Kontoor Brands and Duluth Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kontoor Brands and Duluth Holdings
The main advantage of trading using opposite Kontoor Brands and Duluth Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kontoor Brands position performs unexpectedly, Duluth Holdings 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 Duluth Holdings will offset losses from the drop in Duluth Holdings' long position.| Kontoor Brands vs. Vince Holding Corp | Kontoor Brands vs. Ermenegildo Zegna NV | Kontoor Brands vs. Columbia Sportswear | Kontoor Brands vs. Gildan Activewear |
| Duluth Holdings vs. Zumiez Inc | Duluth Holdings vs. JJill Inc | Duluth Holdings vs. Shoe Carnival | Duluth Holdings vs. Cato Corporation |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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