Correlation Between Victorias Secret and Zumiez
Can any of the company-specific risk be diversified away by investing in both Victorias Secret and Zumiez 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 Zumiez 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 Zumiez Inc, you can compare the effects of market volatilities on Victorias Secret and Zumiez 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 Zumiez. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victorias Secret and Zumiez.
Diversification Opportunities for Victorias Secret and Zumiez
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Victorias and Zumiez is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Victorias Secret Co and Zumiez Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zumiez Inc 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 Zumiez. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zumiez Inc has no effect on the direction of Victorias Secret i.e., Victorias Secret and Zumiez go up and down completely randomly.
Pair Corralation between Victorias Secret and Zumiez
Given the investment horizon of 90 days Victorias Secret Co is expected to under-perform the Zumiez. In addition to that, Victorias Secret is 1.09 times more volatile than Zumiez Inc. It trades about -0.26 of its total potential returns per unit of risk. Zumiez Inc is currently generating about 0.06 per unit of volatility. If you would invest 1,547 in Zumiez Inc on November 18, 2024 and sell it today you would earn a total of 30.00 from holding Zumiez Inc or generate 1.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Victorias Secret Co vs. Zumiez Inc
Performance |
| Timeline |
| Victorias Secret |
| Zumiez Inc |
Victorias Secret and Zumiez Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victorias Secret and Zumiez
The main advantage of trading using opposite Victorias Secret and Zumiez positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victorias Secret position performs unexpectedly, Zumiez 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 Zumiez will offset losses from the drop in Zumiez's long position.| Victorias Secret vs. Ross Stores | Victorias Secret vs. Childrens Place | Victorias Secret vs. Buckle Inc | Victorias Secret vs. Guess Inc |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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