Correlation Between Vera Bradley and Acme United
Can any of the company-specific risk be diversified away by investing in both Vera Bradley and Acme United 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 Vera Bradley and Acme United into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vera Bradley and Acme United, you can compare the effects of market volatilities on Vera Bradley and Acme United 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 Vera Bradley with a short position of Acme United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vera Bradley and Acme United.
Diversification Opportunities for Vera Bradley and Acme United
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vera and Acme is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Vera Bradley and Acme United in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acme United and Vera Bradley 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 Vera Bradley are associated (or correlated) with Acme United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acme United has no effect on the direction of Vera Bradley i.e., Vera Bradley and Acme United go up and down completely randomly.
Pair Corralation between Vera Bradley and Acme United
Considering the 90-day investment horizon Vera Bradley is expected to generate 2.02 times less return on investment than Acme United. In addition to that, Vera Bradley is 1.22 times more volatile than Acme United. It trades about 0.1 of its total potential returns per unit of risk. Acme United is currently generating about 0.26 per unit of volatility. If you would invest 4,050 in Acme United on August 28, 2024 and sell it today you would earn a total of 425.00 from holding Acme United or generate 10.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vera Bradley vs. Acme United
Performance |
| Timeline |
| Vera Bradley |
| Acme United |
Vera Bradley and Acme United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vera Bradley and Acme United
The main advantage of trading using opposite Vera Bradley and Acme United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vera Bradley position performs unexpectedly, Acme United 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 Acme United will offset losses from the drop in Acme United's long position.| Vera Bradley vs. Rocky Brands | Vera Bradley vs. Steven Madden | Vera Bradley vs. Wolverine World Wide | Vera Bradley vs. Caleres |
| Acme United vs. Mannatech Incorporated | Acme United vs. Inter Parfums | Acme United vs. Nu Skin Enterprises | Acme United vs. Procter Gamble |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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