Correlation Between Abercrombie Fitch and Airship AI

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

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

Diversification Opportunities for Abercrombie Fitch and Airship AI

0.35

Correlation Coefficient

Abercrombie Fitch  Airship AI

Weak diversification

The 3 months correlation between Abercrombie and Airship is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Abercrombie Fitch and Airship AI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airship AI Holdings and Abercrombie Fitch 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 Abercrombie Fitch are associated (or correlated) with Airship AI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airship AI Holdings has no effect on the direction of Abercrombie Fitch i.e., Abercrombie Fitch and Airship AI go up and down completely randomly.

Pair Corralation between Abercrombie Fitch and Airship AI

Considering the 90-day investment horizon Abercrombie Fitch is expected to under-perform the Airship AI. But the stock apears to be less risky and, when comparing its historical volatility, Abercrombie Fitch is 2.25 times less risky than Airship AI. The stock trades about -0.29 of its potential returns per unit of risk. The Airship AI Holdings is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  571.00  in Airship AI Holdings on December 22, 2024 and sell it today you would lose (166.00) from holding Airship AI Holdings or give up 29.07% of portfolio value over 90 days.

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

Abercrombie Fitch  vs.  Airship AI Holdings

Abercrombie Fitch

Risk-Adjusted Performance

Very Weak

Over the last 90 days Abercrombie Fitch has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Airship AI Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Airship AI Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Abercrombie Fitch and Airship AI

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

The idea behind Abercrombie Fitch and Airship AI Holdings 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.