Correlation Between L Brands and Destination
Can any of the company-specific risk be diversified away by investing in both L Brands and Destination 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 L Brands and Destination into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between L Brands and Destination XL Group, you can compare the effects of market volatilities on L Brands and Destination 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 L Brands with a short position of Destination. Check out your portfolio center. Please also check ongoing floating volatility patterns of L Brands and Destination.
Diversification Opportunities for L Brands and Destination
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between L Brands and Destination is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding L Brands and Destination XL Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Destination XL Group and L Brands 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 L Brands are associated (or correlated) with Destination. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Destination XL Group has no effect on the direction of L Brands i.e., L Brands and Destination go up and down completely randomly.
Pair Corralation between L Brands and Destination
If you would invest (100.00) in L Brands on February 4, 2024 and sell it today you would earn a total of 100.00 from holding L Brands or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
L Brands vs. Destination XL Group
Performance |
Timeline |
L Brands |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Destination XL Group |
L Brands and Destination Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with L Brands and Destination
The main advantage of trading using opposite L Brands and Destination positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if L Brands position performs unexpectedly, Destination 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 Destination will offset losses from the drop in Destination's long position.L Brands vs. The Cheesecake Factory | L Brands vs. Cedar Fair LP | L Brands vs. Coty Inc | L Brands vs. Hillman Solutions Corp |
Destination vs. Cato Corporation | Destination vs. Zumiez Inc | Destination vs. Tillys Inc | Destination vs. Duluth Holdings |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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