Correlation Between Vista Outdoor and Carters
Can any of the company-specific risk be diversified away by investing in both Vista Outdoor and Carters 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 Vista Outdoor and Carters into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vista Outdoor and Carters, you can compare the effects of market volatilities on Vista Outdoor and Carters 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 Vista Outdoor with a short position of Carters. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vista Outdoor and Carters.
Diversification Opportunities for Vista Outdoor and Carters
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vista and Carters is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Vista Outdoor and Carters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carters and Vista Outdoor 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 Vista Outdoor are associated (or correlated) with Carters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carters has no effect on the direction of Vista Outdoor i.e., Vista Outdoor and Carters go up and down completely randomly.
Pair Corralation between Vista Outdoor and Carters
Given the investment horizon of 90 days Vista Outdoor is expected to generate 0.95 times more return on investment than Carters. However, Vista Outdoor is 1.05 times less risky than Carters. It trades about 0.11 of its potential returns per unit of risk. Carters is currently generating about -0.04 per unit of risk. If you would invest 2,852 in Vista Outdoor on August 27, 2024 and sell it today you would earn a total of 1,590 from holding Vista Outdoor or generate 55.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vista Outdoor vs. Carters
Performance |
| Timeline |
| Vista Outdoor |
| Carters |
Vista Outdoor and Carters Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vista Outdoor and Carters
The main advantage of trading using opposite Vista Outdoor and Carters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vista Outdoor position performs unexpectedly, Carters 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 Carters will offset losses from the drop in Carters' long position.| Vista Outdoor vs. MCBC Holdings | Vista Outdoor vs. Winnebago Industries | Vista Outdoor vs. LCI Industries | Vista Outdoor vs. Thor Industries |
| Carters vs. VF Corporation | Carters vs. Levi Strauss Co | Carters vs. Under Armour A | Carters vs. Oxford Industries |
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 CEOs Directory module to screen CEOs from public companies around the world.
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