Correlation Between Vera Bradley and Analog Devices
Can any of the company-specific risk be diversified away by investing in both Vera Bradley and Analog Devices 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 Analog Devices into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vera Bradley and Analog Devices, you can compare the effects of market volatilities on Vera Bradley and Analog Devices 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 Analog Devices. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vera Bradley and Analog Devices.
Diversification Opportunities for Vera Bradley and Analog Devices
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Vera and Analog is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Vera Bradley and Analog Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Analog Devices 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 Analog Devices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Analog Devices has no effect on the direction of Vera Bradley i.e., Vera Bradley and Analog Devices go up and down completely randomly.
Pair Corralation between Vera Bradley and Analog Devices
Considering the 90-day investment horizon Vera Bradley is expected to generate 1.11 times more return on investment than Analog Devices. However, Vera Bradley is 1.11 times more volatile than Analog Devices. It trades about 0.33 of its potential returns per unit of risk. Analog Devices is currently generating about -0.06 per unit of risk. If you would invest 507.00 in Vera Bradley on September 3, 2024 and sell it today you would earn a total of 78.00 from holding Vera Bradley or generate 15.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vera Bradley vs. Analog Devices
Performance |
| Timeline |
| Vera Bradley |
| Analog Devices |
Vera Bradley and Analog Devices Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vera Bradley and Analog Devices
The main advantage of trading using opposite Vera Bradley and Analog Devices positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vera Bradley position performs unexpectedly, Analog Devices 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 Analog Devices will offset losses from the drop in Analog Devices' long position.| Vera Bradley vs. Rocky Brands | Vera Bradley vs. Steven Madden | Vera Bradley vs. Wolverine World Wide | Vera Bradley vs. Caleres |
| Analog Devices vs. Silicon Motion Technology | Analog Devices vs. ASE Industrial Holding | Analog Devices vs. SemiLEDS | Analog Devices vs. Advanced Micro Devices |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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