Correlation Between Tapestry and Victorias Secret
Can any of the company-specific risk be diversified away by investing in both Tapestry 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 Tapestry and Victorias Secret into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tapestry and Victorias Secret Co, you can compare the effects of market volatilities on Tapestry 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 Tapestry with a short position of Victorias Secret. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tapestry and Victorias Secret.
Diversification Opportunities for Tapestry and Victorias Secret
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tapestry and Victorias is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Tapestry and Victorias Secret Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victorias Secret and Tapestry 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 Tapestry 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 Tapestry i.e., Tapestry and Victorias Secret go up and down completely randomly.
Pair Corralation between Tapestry and Victorias Secret
Considering the 90-day investment horizon Tapestry is expected to generate 1.43 times less return on investment than Victorias Secret. In addition to that, Tapestry is 1.19 times more volatile than Victorias Secret Co. It trades about 0.2 of its total potential returns per unit of risk. Victorias Secret Co is currently generating about 0.34 per unit of volatility. If you would invest 2,570 in Victorias Secret Co on August 30, 2024 and sell it today you would earn a total of 1,180 from holding Victorias Secret Co or generate 45.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 97.73% |
| Values | Daily Returns |
Tapestry vs. Victorias Secret Co
Performance |
| Timeline |
| Tapestry |
| Victorias Secret |
Tapestry and Victorias Secret Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tapestry and Victorias Secret
The main advantage of trading using opposite Tapestry and Victorias Secret positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tapestry 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.| Tapestry vs. Signet Jewelers | Tapestry vs. Movado Group | Tapestry vs. Lanvin Group Holdings | Tapestry vs. TheRealReal |
| 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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