Correlation Between Victorias Secret and Dillards
Can any of the company-specific risk be diversified away by investing in both Victorias Secret and Dillards 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 Dillards 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 Dillards, you can compare the effects of market volatilities on Victorias Secret and Dillards 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 Dillards. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victorias Secret and Dillards.
Diversification Opportunities for Victorias Secret and Dillards
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Victorias and Dillards is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Victorias Secret Co and Dillards in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dillards 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 Dillards. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dillards has no effect on the direction of Victorias Secret i.e., Victorias Secret and Dillards go up and down completely randomly.
Pair Corralation between Victorias Secret and Dillards
Given the investment horizon of 90 days Victorias Secret is expected to generate 2.83 times less return on investment than Dillards. In addition to that, Victorias Secret is 1.49 times more volatile than Dillards. It trades about 0.01 of its total potential returns per unit of risk. Dillards is currently generating about 0.04 per unit of volatility. If you would invest 30,342 in Dillards on August 30, 2024 and sell it today you would earn a total of 14,399 from holding Dillards or generate 47.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Victorias Secret Co vs. Dillards
Performance |
| Timeline |
| Victorias Secret |
| Dillards |
Victorias Secret and Dillards Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victorias Secret and Dillards
The main advantage of trading using opposite Victorias Secret and Dillards positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victorias Secret position performs unexpectedly, Dillards 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 Dillards will offset losses from the drop in Dillards' long position.| Victorias Secret vs. Capri Holdings | Victorias Secret vs. Movado Group | Victorias Secret vs. Tapestry | Victorias Secret vs. Brilliant Earth Group |
| Dillards vs. Macys Inc | Dillards vs. Kohls Corp | Dillards vs. Marks Spencer Group | Dillards vs. Marks and Spencer |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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