Correlation Between Abercrombie Fitch and Public Service
Can any of the company-specific risk be diversified away by investing in both Abercrombie Fitch and Public Service 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 Public Service into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abercrombie Fitch and Public Service Enterprise, you can compare the effects of market volatilities on Abercrombie Fitch and Public Service 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 Public Service. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abercrombie Fitch and Public Service.
Diversification Opportunities for Abercrombie Fitch and Public Service
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Abercrombie and Public is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Abercrombie Fitch and Public Service Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Service Enterprise 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 Public Service. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Service Enterprise has no effect on the direction of Abercrombie Fitch i.e., Abercrombie Fitch and Public Service go up and down completely randomly.
Pair Corralation between Abercrombie Fitch and Public Service
Considering the 90-day investment horizon Abercrombie Fitch is expected to generate 2.83 times more return on investment than Public Service. However, Abercrombie Fitch is 2.83 times more volatile than Public Service Enterprise. It trades about 0.08 of its potential returns per unit of risk. Public Service Enterprise is currently generating about 0.01 per unit of risk. If you would invest 3,458 in Abercrombie Fitch on January 19, 2024 and sell it today you would earn a total of 7,890 from holding Abercrombie Fitch or generate 228.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abercrombie Fitch vs. Public Service Enterprise
Performance |
| Timeline |
| Abercrombie Fitch |
| Public Service Enterprise |
Abercrombie Fitch and Public Service Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abercrombie Fitch and Public Service
The main advantage of trading using opposite Abercrombie Fitch and Public Service positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abercrombie Fitch position performs unexpectedly, Public Service 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 Public Service will offset losses from the drop in Public Service's long position.| Abercrombie Fitch vs. Gap Inc | Abercrombie Fitch vs. Urban Outfitters | Abercrombie Fitch vs. Foot Locker | Abercrombie Fitch vs. Childrens Place |
| Public Service vs. CenterPoint Energy | Public Service vs. FirstEnergy | Public Service vs. Pinnacle West Capital | Public Service vs. Edison 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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