Correlation Between Victorias Secret and Lucid
Can any of the company-specific risk be diversified away by investing in both Victorias Secret and Lucid 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 Lucid 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 Lucid Group, you can compare the effects of market volatilities on Victorias Secret and Lucid 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 Lucid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victorias Secret and Lucid.
Diversification Opportunities for Victorias Secret and Lucid
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Victorias and Lucid is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Victorias Secret Co and Lucid Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lucid 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 Lucid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lucid Group has no effect on the direction of Victorias Secret i.e., Victorias Secret and Lucid go up and down completely randomly.
Pair Corralation between Victorias Secret and Lucid
Given the investment horizon of 90 days Victorias Secret Co is expected to generate 0.75 times more return on investment than Lucid. However, Victorias Secret Co is 1.34 times less risky than Lucid. It trades about 0.13 of its potential returns per unit of risk. Lucid Group is currently generating about -0.02 per unit of risk. If you would invest 2,080 in Victorias Secret Co on August 24, 2024 and sell it today you would earn a total of 1,417 from holding Victorias Secret Co or generate 68.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Victorias Secret Co vs. Lucid Group
Performance |
| Timeline |
| Victorias Secret |
| Lucid Group |
Victorias Secret and Lucid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victorias Secret and Lucid
The main advantage of trading using opposite Victorias Secret and Lucid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victorias Secret position performs unexpectedly, Lucid 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 Lucid will offset losses from the drop in Lucid's long position.| Victorias Secret vs. Ross Stores | Victorias Secret vs. Childrens Place | Victorias Secret vs. Guess Inc | Victorias Secret vs. Cato Corporation |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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