Correlation Between Reitmans and Industria
Can any of the company-specific risk be diversified away by investing in both Reitmans and Industria 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 Reitmans and Industria into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reitmans Limited and Industria de Diseno, you can compare the effects of market volatilities on Reitmans and Industria 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 Reitmans with a short position of Industria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reitmans and Industria.
Diversification Opportunities for Reitmans and Industria
Very good diversification
The 3 months correlation between Reitmans and Industria is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Reitmans Limited and Industria de Diseno in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industria de Diseno and Reitmans 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 Reitmans Limited are associated (or correlated) with Industria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industria de Diseno has no effect on the direction of Reitmans i.e., Reitmans and Industria go up and down completely randomly.
Pair Corralation between Reitmans and Industria
Assuming the 90 days horizon Reitmans Limited is expected to under-perform the Industria. But the pink sheet apears to be less risky and, when comparing its historical volatility, Reitmans Limited is 5.4 times less risky than Industria. The pink sheet trades about -0.21 of its potential returns per unit of risk. The Industria de Diseno is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,556 in Industria de Diseno on November 28, 2024 and sell it today you would earn a total of 179.00 from holding Industria de Diseno or generate 7.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Reitmans Limited vs. Industria de Diseno
Performance |
| Timeline |
| Reitmans Limited |
| Industria de Diseno |
Reitmans and Industria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reitmans and Industria
The main advantage of trading using opposite Reitmans and Industria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reitmans position performs unexpectedly, Industria 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 Industria will offset losses from the drop in Industria's long position.| Reitmans vs. NEXT plc | Reitmans vs. Reitmans Limited | Reitmans vs. Lulus Fashion Lounge | Reitmans vs. Duluth Holdings |
| Industria vs. Aritzia | Industria vs. Boot Barn Holdings | Industria vs. Guess Inc | Industria vs. The TJX Companies |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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