Correlation Between Express and Designer Brands

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

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

Diversification Opportunities for Express and Designer Brands

  Correlation Coefficient
Designer Brands

Very good diversification

The 3 months correlation between Express and Designer is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Express and Designer Brands in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Designer Brands 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 Designer Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Designer Brands has no effect on the direction of Express i.e., Express and Designer Brands go up and down completely randomly.

Pair Corralation between Express and Designer Brands

Given the investment horizon of 90 days Express is expected to generate 3.12 times more return on investment than Designer Brands. However, Express is 3.12 times more volatile than Designer Brands. It trades about 0.08 of its potential returns per unit of risk. Designer Brands is currently generating about 0.08 per unit of risk. If you would invest  175.00  in Express on May 5, 2021 and sell it today you would earn a total of  339.00  from holding Express or generate 193.71% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
ValuesDaily Returns

Express  vs.  Designer Brands

 Performance (%) 
 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 unsteady basic indicators, Express reported solid returns over the last few months and may actually be approaching a breakup point.

Express Price Channel

Designer Brands 
 Designer Performance
0 of 100
Over the last 90 days Designer Brands has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's fundamental drivers remain nearly stable which may send shares a bit higher in September 2021. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Designer Price Channel

Express and Designer Brands Volatility Contrast

 Predicted Return Density 

Pair Trading with Express and Designer Brands

The main advantage of trading using opposite Express and Designer Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Express position performs unexpectedly, Designer 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 Designer Brands will offset losses from the drop in Designer Brands' long position.
The idea behind Express and Designer Brands 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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