Correlation Between Abercrombie Fitch and Express

By analyzing existing cross correlation between Abercrombie Fitch and Express, you can compare the effects of market volatilities on Abercrombie Fitch and Express 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 Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abercrombie Fitch and Express.

Specify exactly 2 symbols:

Can any of the company-specific risk be diversified away by investing in both Abercrombie Fitch and Express 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 Express into the same portfolio, which is an essential part of the fundamental portfolio management process.

Diversification Opportunities for Abercrombie Fitch and Express

0.67
  Correlation Coefficient
Abercrombie Fitch
Express

Poor diversification

The 3 months correlation between Abercrombie and Express is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Abercrombie Fitch and Express in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Express 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 Express. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Express has no effect on the direction of Abercrombie Fitch i.e., Abercrombie Fitch and Express go up and down completely randomly.

Pair Corralation between Abercrombie Fitch and Express

Considering the 90-day investment horizon Abercrombie Fitch is expected to under-perform the Express. But the stock apears to be less risky and, when comparing its historical volatility, Abercrombie Fitch is 3.04 times less risky than Express. The stock trades about -0.01 of its potential returns per unit of risk. The Express is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  494.00  in Express on May 5, 2021 and sell it today you would earn a total of  20.00  from holding Express or generate 4.05% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Abercrombie Fitch  vs.  Express

 Performance (%) 
      Timeline 
Abercrombie Fitch 
 Abercrombie Performance
0 of 100
Over the last 90 days Abercrombie Fitch has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Abercrombie Fitch is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Abercrombie Price Channel

Express 
 Express Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Express are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, Express reported solid returns over the last few months and may actually be approaching a breakup point.

Express Price Channel

Abercrombie Fitch and Express Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Abercrombie Fitch and Express

The main advantage of trading using opposite Abercrombie Fitch and Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abercrombie Fitch position performs unexpectedly, Express 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 Express will offset losses from the drop in Express' long position.
The idea behind Abercrombie Fitch and Express pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Express

Pair trading matchups for Express

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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

Other Complementary Tools

Transaction History
View history of all your transactions and understand their impact on performance
Go
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Go
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Go
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
Go
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Go
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Go
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Go
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Go
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Go