Correlation Between Buckle and Abercrombie Fitch

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

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

Diversification Opportunities for Buckle and Abercrombie Fitch

0.67
  Correlation Coefficient
Buckle Inc
Abercrombie Fitch

Poor diversification

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

Pair Corralation between Buckle and Abercrombie Fitch

Considering the 90-day investment horizon Buckle Inc is expected to generate 0.99 times more return on investment than Abercrombie Fitch. However, Buckle Inc is 1.01 times less risky than Abercrombie Fitch. It trades about 0.01 of its potential returns per unit of risk. Abercrombie Fitch is currently generating about 0.01 per unit of risk. If you would invest  4,316  in Buckle Inc on May 5, 2021 and sell it today you would lose (7.00)  from holding Buckle Inc or give up 0.16% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Buckle Inc  vs.  Abercrombie Fitch

 Performance (%) 
      Timeline 
Buckle Inc 
 Buckle Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Buckle Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound forward-looking signals, Buckle is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Buckle Price Channel

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

Buckle and Abercrombie Fitch Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Buckle and Abercrombie Fitch

The main advantage of trading using opposite Buckle and Abercrombie Fitch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Buckle position performs unexpectedly, Abercrombie Fitch 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 Abercrombie Fitch will offset losses from the drop in Abercrombie Fitch's long position.

Buckle Inc

Pair trading matchups for Buckle

The idea behind Buckle Inc and Abercrombie Fitch 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.
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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