Correlation Between Victorias Secret and Kohls Corp
Can any of the company-specific risk be diversified away by investing in both Victorias Secret and Kohls Corp 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 Kohls Corp 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 Kohls Corp, you can compare the effects of market volatilities on Victorias Secret and Kohls Corp 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 Kohls Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victorias Secret and Kohls Corp.
Diversification Opportunities for Victorias Secret and Kohls Corp
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Victorias and Kohls is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Victorias Secret Co and Kohls Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kohls Corp 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 Kohls Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kohls Corp has no effect on the direction of Victorias Secret i.e., Victorias Secret and Kohls Corp go up and down completely randomly.
Pair Corralation between Victorias Secret and Kohls Corp
Given the investment horizon of 90 days Victorias Secret Co is expected to generate 0.53 times more return on investment than Kohls Corp. However, Victorias Secret Co is 1.89 times less risky than Kohls Corp. It trades about 0.51 of its potential returns per unit of risk. Kohls Corp is currently generating about -0.2 per unit of risk. If you would invest 2,850 in Victorias Secret Co on August 30, 2024 and sell it today you would earn a total of 949.00 from holding Victorias Secret Co or generate 33.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Victorias Secret Co vs. Kohls Corp
Performance |
| Timeline |
| Victorias Secret |
| Kohls Corp |
Victorias Secret and Kohls Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victorias Secret and Kohls Corp
The main advantage of trading using opposite Victorias Secret and Kohls Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victorias Secret position performs unexpectedly, Kohls Corp 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 Kohls Corp will offset losses from the drop in Kohls Corp's long position.| Victorias Secret vs. Ross Stores | Victorias Secret vs. Childrens Place | Victorias Secret vs. Buckle Inc | Victorias Secret vs. Guess Inc |
| Kohls Corp vs. Nordstrom | Kohls Corp vs. Dillards | Kohls Corp vs. Marks Spencer Group | Kohls Corp 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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