Correlation Between Victorias Secret and Shoe Carnival
Can any of the company-specific risk be diversified away by investing in both Victorias Secret and Shoe Carnival 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 Shoe Carnival 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 Shoe Carnival, you can compare the effects of market volatilities on Victorias Secret and Shoe Carnival 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 Shoe Carnival. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victorias Secret and Shoe Carnival.
Diversification Opportunities for Victorias Secret and Shoe Carnival
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Victorias and Shoe is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Victorias Secret Co and Shoe Carnival in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shoe Carnival 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 Shoe Carnival. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shoe Carnival has no effect on the direction of Victorias Secret i.e., Victorias Secret and Shoe Carnival go up and down completely randomly.
Pair Corralation between Victorias Secret and Shoe Carnival
Given the investment horizon of 90 days Victorias Secret Co is expected to generate 1.04 times more return on investment than Shoe Carnival. However, Victorias Secret is 1.04 times more volatile than Shoe Carnival. It trades about 0.34 of its potential returns per unit of risk. Shoe Carnival is currently generating about -0.22 per unit of risk. If you would invest 2,570 in Victorias Secret Co on August 30, 2024 and sell it today you would earn a total of 1,180 from holding Victorias Secret Co or generate 45.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
Victorias Secret Co vs. Shoe Carnival
Performance |
| Timeline |
| Victorias Secret |
| Shoe Carnival |
Victorias Secret and Shoe Carnival Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victorias Secret and Shoe Carnival
The main advantage of trading using opposite Victorias Secret and Shoe Carnival positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victorias Secret position performs unexpectedly, Shoe Carnival 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 Shoe Carnival will offset losses from the drop in Shoe Carnival's long position.| Victorias Secret vs. Capri Holdings | Victorias Secret vs. Movado Group | Victorias Secret vs. Tapestry | Victorias Secret vs. Brilliant Earth Group |
| Shoe Carnival vs. Citi Trends | Shoe Carnival vs. Zumiez Inc | Shoe Carnival vs. Buckle Inc | Shoe Carnival 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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