Correlation Between Victorias Secret and 125896BN9

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Can any of the company-specific risk be diversified away by investing in both Victorias Secret and 125896BN9 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 125896BN9 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 CMS ENERGY P, you can compare the effects of market volatilities on Victorias Secret and 125896BN9 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 125896BN9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victorias Secret and 125896BN9.

Diversification Opportunities for Victorias Secret and 125896BN9

-0.04
  Correlation Coefficient

Good diversification

The 3 months correlation between Victorias and 125896BN9 is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Victorias Secret Co and CMS ENERGY P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CMS ENERGY P 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 125896BN9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CMS ENERGY P has no effect on the direction of Victorias Secret i.e., Victorias Secret and 125896BN9 go up and down completely randomly.

Pair Corralation between Victorias Secret and 125896BN9

Given the investment horizon of 90 days Victorias Secret Co is expected to generate 2.78 times more return on investment than 125896BN9. However, Victorias Secret is 2.78 times more volatile than CMS ENERGY P. It trades about 0.4 of its potential returns per unit of risk. CMS ENERGY P is currently generating about -0.23 per unit of risk. If you would invest  2,221  in Victorias Secret Co on September 12, 2024 and sell it today you would earn a total of  2,516  from holding Victorias Secret Co or generate 113.26% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy51.56%
ValuesDaily Returns

Victorias Secret Co  vs.  CMS ENERGY P

 Performance 
       Timeline  
Victorias Secret 

Risk-Adjusted Performance

31 of 100

 
Weak
 
Strong
Very Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Victorias Secret Co are ranked lower than 31 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent fundamental indicators, Victorias Secret displayed solid returns over the last few months and may actually be approaching a breakup point.
CMS ENERGY P 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days CMS ENERGY P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for CMS ENERGY P investors.

Victorias Secret and 125896BN9 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Victorias Secret and 125896BN9

The main advantage of trading using opposite Victorias Secret and 125896BN9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victorias Secret position performs unexpectedly, 125896BN9 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 125896BN9 will offset losses from the drop in 125896BN9's long position.
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The idea behind Victorias Secret Co and CMS ENERGY P pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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