Correlation Between Victorias Secret and Birks
Can any of the company-specific risk be diversified away by investing in both Victorias Secret and Birks 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 Victorias Secret and Birks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Victorias Secret Co and Birks Group, you can compare the effects of market volatilities on Victorias Secret and Birks 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 Victorias Secret with a short position of Birks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victorias Secret and Birks.
Diversification Opportunities for Victorias Secret and Birks
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Victorias and Birks is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Victorias Secret Co and Birks Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Birks Group and Victorias Secret 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 Victorias Secret Co are associated (or correlated) with Birks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Birks Group has no effect on the direction of Victorias Secret i.e., Victorias Secret and Birks go up and down completely randomly.
Pair Corralation between Victorias Secret and Birks
Given the investment horizon of 90 days Victorias Secret Co is expected to under-perform the Birks. But the stock apears to be less risky and, when comparing its historical volatility, Victorias Secret Co is 2.46 times less risky than Birks. The stock trades about -0.28 of its potential returns per unit of risk. The Birks Group is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 150.00 in Birks Group on November 9, 2024 and sell it today you would lose (11.00) from holding Birks Group or give up 7.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Victorias Secret Co vs. Birks Group
Performance |
| Timeline |
| Victorias Secret |
| Birks Group |
Victorias Secret and Birks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victorias Secret and Birks
The main advantage of trading using opposite Victorias Secret and Birks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victorias Secret position performs unexpectedly, Birks 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 Birks will offset losses from the drop in Birks' long position.| Victorias Secret vs. Ross Stores | Victorias Secret vs. Childrens Place | Victorias Secret vs. Buckle Inc | Victorias Secret vs. Guess Inc |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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