Correlation Between Alignment Healthcare and Victorias Secret

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

By analyzing existing cross correlation between Alignment Healthcare LLC and Victorias Secret Co, you can compare the effects of market volatilities on Alignment Healthcare and Victorias Secret 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 Alignment Healthcare with a short position of Victorias Secret. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alignment Healthcare and Victorias Secret.

Diversification Opportunities for Alignment Healthcare and Victorias Secret

-0.75

Correlation Coefficient

Alignment Healthcare  Victorias Secret

Pay attention - limited upside

The 3 months correlation between Alignment and Victorias is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Alignment Healthcare LLC and Victorias Secret Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victorias Secret and Alignment Healthcare 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 Alignment Healthcare LLC are associated (or correlated) with Victorias Secret. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victorias Secret has no effect on the direction of Alignment Healthcare i.e., Alignment Healthcare and Victorias Secret go up and down completely randomly.

Pair Corralation between Alignment Healthcare and Victorias Secret

Given the investment horizon of 90 days Alignment Healthcare LLC is expected to generate 0.96 times more return on investment than Victorias Secret. However, Alignment Healthcare LLC is 1.05 times less risky than Victorias Secret. It trades about 0.25 of its potential returns per unit of risk. Victorias Secret Co is currently generating about -0.3 per unit of risk. If you would invest  1,071  in Alignment Healthcare LLC on December 21, 2024 and sell it today you would earn a total of  690.00  from holding Alignment Healthcare LLC or generate 64.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Alignment Healthcare LLC  vs.  Victorias Secret Co

Alignment Healthcare LLC

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Alignment Healthcare LLC are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical indicators, Alignment Healthcare exhibited solid returns over the last few months and may actually be approaching a breakup point.

Victorias Secret

Risk-Adjusted Performance

Very Weak

Over the last 90 days Victorias Secret Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Alignment Healthcare and Victorias Secret

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

The idea behind Alignment Healthcare LLC and Victorias Secret Co 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.

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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.