Correlation Between Victorias Secret and Gildan Activewear
Can any of the company-specific risk be diversified away by investing in both Victorias Secret and Gildan Activewear 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 Gildan Activewear 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 Gildan Activewear, you can compare the effects of market volatilities on Victorias Secret and Gildan Activewear 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 Gildan Activewear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victorias Secret and Gildan Activewear.
Diversification Opportunities for Victorias Secret and Gildan Activewear
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Victorias and Gildan is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Victorias Secret Co and Gildan Activewear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gildan Activewear 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 Gildan Activewear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gildan Activewear has no effect on the direction of Victorias Secret i.e., Victorias Secret and Gildan Activewear go up and down completely randomly.
Pair Corralation between Victorias Secret and Gildan Activewear
Given the investment horizon of 90 days Victorias Secret Co is expected to under-perform the Gildan Activewear. In addition to that, Victorias Secret is 2.03 times more volatile than Gildan Activewear. It trades about -0.28 of its total potential returns per unit of risk. Gildan Activewear is currently generating about 0.41 per unit of volatility. If you would invest 4,691 in Gildan Activewear on November 4, 2024 and sell it today you would earn a total of 470.00 from holding Gildan Activewear or generate 10.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Victorias Secret Co vs. Gildan Activewear
Performance |
| Timeline |
| Victorias Secret |
| Gildan Activewear |
Victorias Secret and Gildan Activewear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victorias Secret and Gildan Activewear
The main advantage of trading using opposite Victorias Secret and Gildan Activewear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victorias Secret position performs unexpectedly, Gildan Activewear 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 Gildan Activewear will offset losses from the drop in Gildan Activewear's long position.| Victorias Secret vs. Ross Stores | Victorias Secret vs. Childrens Place | Victorias Secret vs. Buckle Inc | Victorias Secret vs. Guess Inc |
| Gildan Activewear vs. Vince Holding Corp | Gildan Activewear vs. Ermenegildo Zegna NV | Gildan Activewear vs. Columbia Sportswear | Gildan Activewear vs. G III Apparel 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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