Correlation Between Park Ohio and Victorias Secret
Can any of the company-specific risk be diversified away by investing in both Park Ohio and Victorias Secret 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 Park Ohio and Victorias Secret into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Park Ohio Holdings and Victorias Secret Co, you can compare the effects of market volatilities on Park Ohio and Victorias Secret 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 Park Ohio with a short position of Victorias Secret. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Ohio and Victorias Secret.
Diversification Opportunities for Park Ohio and Victorias Secret
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Park and Victorias is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Park Ohio Holdings and Victorias Secret Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victorias Secret and Park Ohio 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 Park Ohio Holdings are associated (or correlated) with Victorias Secret. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victorias Secret has no effect on the direction of Park Ohio i.e., Park Ohio and Victorias Secret go up and down completely randomly.
Pair Corralation between Park Ohio and Victorias Secret
Given the investment horizon of 90 days Park Ohio is expected to generate 2.46 times less return on investment than Victorias Secret. In addition to that, Park Ohio is 1.41 times more volatile than Victorias Secret Co. It trades about 0.14 of its total potential returns per unit of risk. Victorias Secret Co is currently generating about 0.48 per unit of volatility. If you would invest 2,850 in Victorias Secret Co on August 30, 2024 and sell it today you would earn a total of 900.00 from holding Victorias Secret Co or generate 31.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Park Ohio Holdings vs. Victorias Secret Co
Performance |
| Timeline |
| Park Ohio Holdings |
| Victorias Secret |
Park Ohio and Victorias Secret Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Ohio and Victorias Secret
The main advantage of trading using opposite Park Ohio and Victorias Secret positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Ohio position performs unexpectedly, Victorias Secret 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 Victorias Secret will offset losses from the drop in Victorias Secret's long position.| Park Ohio vs. Hurco Companies | Park Ohio vs. Enerpac Tool Group | Park Ohio vs. China Yuchai International | Park Ohio vs. Luxfer Holdings PLC |
| Victorias Secret vs. Capri Holdings | Victorias Secret vs. Movado Group | Victorias Secret vs. Tapestry | Victorias Secret vs. Brilliant Earth Group |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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