Correlation Between YETI Holdings and Johnson Outdoors
Can any of the company-specific risk be diversified away by investing in both YETI Holdings and Johnson Outdoors 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 YETI Holdings and Johnson Outdoors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YETI Holdings and Johnson Outdoors, you can compare the effects of market volatilities on YETI Holdings and Johnson Outdoors 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 YETI Holdings with a short position of Johnson Outdoors. Check out your portfolio center. Please also check ongoing floating volatility patterns of YETI Holdings and Johnson Outdoors.
Diversification Opportunities for YETI Holdings and Johnson Outdoors
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between YETI and Johnson is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding YETI Holdings and Johnson Outdoors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johnson Outdoors and YETI Holdings 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 YETI Holdings are associated (or correlated) with Johnson Outdoors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johnson Outdoors has no effect on the direction of YETI Holdings i.e., YETI Holdings and Johnson Outdoors go up and down completely randomly.
Pair Corralation between YETI Holdings and Johnson Outdoors
Given the investment horizon of 90 days YETI Holdings is expected to generate 1.59 times more return on investment than Johnson Outdoors. However, YETI Holdings is 1.59 times more volatile than Johnson Outdoors. It trades about 0.12 of its potential returns per unit of risk. Johnson Outdoors is currently generating about -0.04 per unit of risk. If you would invest 3,601 in YETI Holdings on August 24, 2024 and sell it today you would earn a total of 249.00 from holding YETI Holdings or generate 6.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
YETI Holdings vs. Johnson Outdoors
Performance |
| Timeline |
| YETI Holdings |
| Johnson Outdoors |
YETI Holdings and Johnson Outdoors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YETI Holdings and Johnson Outdoors
The main advantage of trading using opposite YETI Holdings and Johnson Outdoors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YETI Holdings position performs unexpectedly, Johnson Outdoors 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 Johnson Outdoors will offset losses from the drop in Johnson Outdoors' long position.| YETI Holdings vs. Acushnet Holdings Corp | YETI Holdings vs. Bowlero Corp | YETI Holdings vs. Madison Square Garden | YETI Holdings vs. Callaway Golf |
| Johnson Outdoors vs. Vista Outdoor | Johnson Outdoors vs. Clarus Corp | Johnson Outdoors vs. Escalade Incorporated | Johnson Outdoors vs. JAKKS Pacific |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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