Correlation Between RYU Apparel and Ermenegildo Zegna
Can any of the company-specific risk be diversified away by investing in both RYU Apparel and Ermenegildo Zegna 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 RYU Apparel and Ermenegildo Zegna into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RYU Apparel and Ermenegildo Zegna NV, you can compare the effects of market volatilities on RYU Apparel and Ermenegildo Zegna 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 RYU Apparel with a short position of Ermenegildo Zegna. Check out your portfolio center. Please also check ongoing floating volatility patterns of RYU Apparel and Ermenegildo Zegna.
Diversification Opportunities for RYU Apparel and Ermenegildo Zegna
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between RYU and Ermenegildo is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding RYU Apparel and Ermenegildo Zegna NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ermenegildo Zegna and RYU Apparel 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 RYU Apparel are associated (or correlated) with Ermenegildo Zegna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ermenegildo Zegna has no effect on the direction of RYU Apparel i.e., RYU Apparel and Ermenegildo Zegna go up and down completely randomly.
Pair Corralation between RYU Apparel and Ermenegildo Zegna
Assuming the 90 days horizon RYU Apparel is expected to generate 7.45 times more return on investment than Ermenegildo Zegna. However, RYU Apparel is 7.45 times more volatile than Ermenegildo Zegna NV. It trades about 0.03 of its potential returns per unit of risk. Ermenegildo Zegna NV is currently generating about -0.02 per unit of risk. If you would invest 1.50 in RYU Apparel on August 23, 2024 and sell it today you would lose (0.84) from holding RYU Apparel or give up 56.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 17.54% |
| Values | Daily Returns |
RYU Apparel vs. Ermenegildo Zegna NV
Performance |
| Timeline |
| RYU Apparel |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Ermenegildo Zegna |
RYU Apparel and Ermenegildo Zegna Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RYU Apparel and Ermenegildo Zegna
The main advantage of trading using opposite RYU Apparel and Ermenegildo Zegna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RYU Apparel position performs unexpectedly, Ermenegildo Zegna 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 Ermenegildo Zegna will offset losses from the drop in Ermenegildo Zegna's long position.| RYU Apparel vs. H M Hennes | RYU Apparel vs. Xcel Brands | RYU Apparel vs. Oxford Industries | RYU Apparel vs. H M Hennes |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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