Correlation Between Oxford Industries and PVH Corp
Can any of the company-specific risk be diversified away by investing in both Oxford Industries and PVH Corp 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 Oxford Industries and PVH Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oxford Industries and PVH Corp, you can compare the effects of market volatilities on Oxford Industries and PVH Corp 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 Oxford Industries with a short position of PVH Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxford Industries and PVH Corp.
Diversification Opportunities for Oxford Industries and PVH Corp
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Oxford and PVH is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Industries and PVH Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PVH Corp and Oxford Industries 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 Oxford Industries are associated (or correlated) with PVH Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PVH Corp has no effect on the direction of Oxford Industries i.e., Oxford Industries and PVH Corp go up and down completely randomly.
Pair Corralation between Oxford Industries and PVH Corp
Considering the 90-day investment horizon Oxford Industries is expected to under-perform the PVH Corp. But the stock apears to be less risky and, when comparing its historical volatility, Oxford Industries is 1.04 times less risky than PVH Corp. The stock trades about -0.13 of its potential returns per unit of risk. The PVH Corp is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 11,471 in PVH Corp on August 24, 2024 and sell it today you would lose (1,525) from holding PVH Corp or give up 13.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oxford Industries vs. PVH Corp
Performance |
| Timeline |
| Oxford Industries |
| PVH Corp |
Oxford Industries and PVH Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oxford Industries and PVH Corp
The main advantage of trading using opposite Oxford Industries and PVH Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oxford Industries position performs unexpectedly, PVH Corp 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 PVH Corp will offset losses from the drop in PVH Corp's long position.| Oxford Industries vs. Columbia Sportswear | Oxford Industries vs. Levi Strauss Co | Oxford Industries vs. Hanesbrands | Oxford Industries vs. Under Armour C |
| PVH Corp vs. VF Corporation | PVH Corp vs. Levi Strauss Co | PVH Corp vs. Under Armour A | PVH Corp vs. Columbia Sportswear |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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