Correlation Between Victorias Secret and Urban Outfitters
Can any of the company-specific risk be diversified away by investing in both Victorias Secret and Urban Outfitters 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 Urban Outfitters 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 Urban Outfitters, you can compare the effects of market volatilities on Victorias Secret and Urban Outfitters 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 Urban Outfitters. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victorias Secret and Urban Outfitters.
Diversification Opportunities for Victorias Secret and Urban Outfitters
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Victorias and Urban is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Victorias Secret Co and Urban Outfitters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Urban Outfitters 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 Urban Outfitters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Urban Outfitters has no effect on the direction of Victorias Secret i.e., Victorias Secret and Urban Outfitters go up and down completely randomly.
Pair Corralation between Victorias Secret and Urban Outfitters
Given the investment horizon of 90 days Victorias Secret Co is expected to generate 0.81 times more return on investment than Urban Outfitters. However, Victorias Secret Co is 1.23 times less risky than Urban Outfitters. It trades about 0.34 of its potential returns per unit of risk. Urban Outfitters is currently generating about 0.16 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 Together |
| Strength | Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
Victorias Secret Co vs. Urban Outfitters
Performance |
| Timeline |
| Victorias Secret |
| Urban Outfitters |
Victorias Secret and Urban Outfitters Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victorias Secret and Urban Outfitters
The main advantage of trading using opposite Victorias Secret and Urban Outfitters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victorias Secret position performs unexpectedly, Urban Outfitters 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 Urban Outfitters will offset losses from the drop in Urban Outfitters' long position.| Victorias Secret vs. Capri Holdings | Victorias Secret vs. Movado Group | Victorias Secret vs. Tapestry | Victorias Secret vs. Brilliant Earth Group |
| Urban Outfitters vs. American Eagle Outfitters | Urban Outfitters vs. Foot Locker | Urban Outfitters vs. Childrens Place | Urban Outfitters vs. Abercrombie Fitch |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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