Correlation Between Destination and L Brands
Can any of the company-specific risk be diversified away by investing in both Destination and L 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 Destination and L Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Destination XL Group and L Brands, you can compare the effects of market volatilities on Destination and L 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 Destination with a short position of L Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Destination and L Brands.
Diversification Opportunities for Destination and L Brands
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Destination and L Brands is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Destination XL Group and L Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on L Brands and Destination 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 Destination XL Group are associated (or correlated) with L Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of L Brands has no effect on the direction of Destination i.e., Destination and L Brands go up and down completely randomly.
Pair Corralation between Destination and L Brands
If you would invest (100.00) in L Brands on January 25, 2024 and sell it today you would earn a total of 100.00 from holding L Brands or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Destination XL Group vs. L Brands
Performance |
| Timeline |
| Destination XL Group |
| L Brands |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Destination and L Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Destination and L Brands
The main advantage of trading using opposite Destination and L Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Destination position performs unexpectedly, L 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 L Brands will offset losses from the drop in L Brands' long position.| Destination vs. Cato Corporation | Destination vs. Zumiez Inc | Destination vs. Tillys Inc | Destination vs. Duluth Holdings |
| L Brands vs. SEI Investments | L Brands vs. Skillful Craftsman Education | L Brands vs. Lindblad Expeditions Holdings | L Brands vs. TFI International |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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