Correlation Between PVH Corp and Pandora AS
Can any of the company-specific risk be diversified away by investing in both PVH Corp and Pandora AS 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 PVH Corp and Pandora AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PVH Corp and Pandora AS, you can compare the effects of market volatilities on PVH Corp and Pandora AS 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 PVH Corp with a short position of Pandora AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of PVH Corp and Pandora AS.
Diversification Opportunities for PVH Corp and Pandora AS
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PVH and Pandora is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding PVH Corp and Pandora AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pandora AS and PVH Corp 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 PVH Corp are associated (or correlated) with Pandora AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pandora AS has no effect on the direction of PVH Corp i.e., PVH Corp and Pandora AS go up and down completely randomly.
Pair Corralation between PVH Corp and Pandora AS
Considering the 90-day investment horizon PVH Corp is expected to under-perform the Pandora AS. In addition to that, PVH Corp is 1.5 times more volatile than Pandora AS. It trades about -0.18 of its total potential returns per unit of risk. Pandora AS is currently generating about 0.31 per unit of volatility. If you would invest 112,350 in Pandora AS on October 26, 2024 and sell it today you would earn a total of 21,850 from holding Pandora AS or generate 19.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.5% |
| Values | Daily Returns |
PVH Corp vs. Pandora AS
Performance |
| Timeline |
| PVH Corp |
| Pandora AS |
PVH Corp and Pandora AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PVH Corp and Pandora AS
The main advantage of trading using opposite PVH Corp and Pandora AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PVH Corp position performs unexpectedly, Pandora AS 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 Pandora AS will offset losses from the drop in Pandora AS's long position.| PVH Corp vs. VF Corporation | PVH Corp vs. Levi Strauss Co | PVH Corp vs. Under Armour A | PVH Corp vs. Columbia Sportswear |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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