Correlation Between Abercrombie Fitch and Designer Brands
Can any of the company-specific risk be diversified away by investing in both Abercrombie Fitch and Designer Brands 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 Abercrombie Fitch and Designer Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abercrombie Fitch and Designer Brands, you can compare the effects of market volatilities on Abercrombie Fitch and Designer Brands 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 Abercrombie Fitch with a short position of Designer Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abercrombie Fitch and Designer Brands.
Diversification Opportunities for Abercrombie Fitch and Designer Brands
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Abercrombie and Designer is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Abercrombie Fitch and Designer Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Designer Brands and Abercrombie Fitch 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 Abercrombie Fitch are associated (or correlated) with Designer Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Designer Brands has no effect on the direction of Abercrombie Fitch i.e., Abercrombie Fitch and Designer Brands go up and down completely randomly.
Pair Corralation between Abercrombie Fitch and Designer Brands
If you would invest 11,685 in Abercrombie Fitch on February 13, 2024 and sell it today you would earn a total of 1,557 from holding Abercrombie Fitch or generate 13.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Abercrombie Fitch vs. Designer Brands
Performance |
| Timeline |
| Abercrombie Fitch |
| Designer Brands |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Abercrombie Fitch and Designer Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abercrombie Fitch and Designer Brands
The main advantage of trading using opposite Abercrombie Fitch and Designer Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abercrombie Fitch position performs unexpectedly, Designer Brands 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 Designer Brands will offset losses from the drop in Designer Brands' long position.| Abercrombie Fitch vs. Gap Inc | Abercrombie Fitch vs. Urban Outfitters | Abercrombie Fitch vs. Foot Locker | Abercrombie Fitch vs. Childrens Place |
| Designer Brands vs. Primo Water Corp | Designer Brands vs. Oatly Group AB | Designer Brands vs. Hurco Companies | Designer Brands vs. ZK International Group |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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