Correlation Between Victorias Secret and PVH Corp
Can any of the company-specific risk be diversified away by investing in both Victorias Secret and PVH 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 PVH 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 PVH Corp, you can compare the effects of market volatilities on Victorias Secret and PVH 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 PVH Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victorias Secret and PVH Corp.
Diversification Opportunities for Victorias Secret and PVH Corp
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Victorias and PVH is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Victorias Secret Co and PVH Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PVH 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 PVH Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PVH Corp has no effect on the direction of Victorias Secret i.e., Victorias Secret and PVH Corp go up and down completely randomly.
Pair Corralation between Victorias Secret and PVH Corp
Given the investment horizon of 90 days Victorias Secret Co is expected to generate 1.73 times more return on investment than PVH Corp. However, Victorias Secret is 1.73 times more volatile than PVH Corp. It trades about 0.03 of its potential returns per unit of risk. PVH Corp is currently generating about -0.13 per unit of risk. If you would invest 3,740 in Victorias Secret Co on October 25, 2024 and sell it today you would earn a total of 94.00 from holding Victorias Secret Co or generate 2.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Victorias Secret Co vs. PVH Corp
Performance |
| Timeline |
| Victorias Secret |
| PVH Corp |
Victorias Secret and PVH Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victorias Secret and PVH Corp
The main advantage of trading using opposite Victorias Secret and PVH Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victorias Secret position performs unexpectedly, PVH 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 PVH Corp will offset losses from the drop in PVH Corp's long position.| Victorias Secret vs. Ross Stores | Victorias Secret vs. Childrens Place | Victorias Secret vs. Buckle Inc | Victorias Secret vs. Guess Inc |
| PVH Corp vs. VF Corporation | PVH Corp vs. Levi Strauss Co | PVH Corp vs. Under Armour A | PVH Corp vs. Columbia Sportswear |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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