Correlation Between Express and Buckle

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

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

Diversification Opportunities for Express and Buckle

0.34
  Correlation Coefficient
Express
Buckle Inc

Weak diversification

The 3 months correlation between Express and Buckle is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Express and Buckle Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Buckle Inc and Express 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 Express are associated (or correlated) with Buckle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Buckle Inc has no effect on the direction of Express i.e., Express and Buckle go up and down completely randomly.

Pair Corralation between Express and Buckle

Given the investment horizon of 90 days Express is expected to under-perform the Buckle. In addition to that, Express is 2.68 times more volatile than Buckle Inc. It trades about -0.18 of its total potential returns per unit of risk. Buckle Inc is currently generating about -0.28 per unit of volatility. If you would invest  4,975  in Buckle Inc on May 1, 2021 and sell it today you would lose (767.00)  from holding Buckle Inc or give up 15.42% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Express  vs.  Buckle Inc

 Performance (%) 
      Timeline 
Express 
 Express Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Express are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Express reported solid returns over the last few months and may actually be approaching a breakup point.

Express Price Channel

Buckle Inc 
 Buckle Performance
0 of 100
Over the last 90 days Buckle Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward-looking signals, Buckle is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Buckle Price Channel

Express and Buckle Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Express and Buckle

The main advantage of trading using opposite Express and Buckle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Express position performs unexpectedly, Buckle 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 Buckle will offset losses from the drop in Buckle's long position.
The idea behind Express and Buckle Inc 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.

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