Correlation Between Abercrombie Fitch and CP ALL

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Can any of the company-specific risk be diversified away by investing in both Abercrombie Fitch and CP ALL 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 CP ALL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abercrombie Fitch and CP ALL Public, you can compare the effects of market volatilities on Abercrombie Fitch and CP ALL 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 CP ALL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abercrombie Fitch and CP ALL.

Diversification Opportunities for Abercrombie Fitch and CP ALL

-0.29
  Correlation Coefficient

Very good diversification

The 3 months correlation between Abercrombie and CVPBF is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Abercrombie Fitch and CP ALL Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CP ALL Public 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 CP ALL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CP ALL Public has no effect on the direction of Abercrombie Fitch i.e., Abercrombie Fitch and CP ALL go up and down completely randomly.

Pair Corralation between Abercrombie Fitch and CP ALL

Considering the 90-day investment horizon Abercrombie Fitch is expected to generate 0.93 times more return on investment than CP ALL. However, Abercrombie Fitch is 1.08 times less risky than CP ALL. It trades about 0.11 of its potential returns per unit of risk. CP ALL Public is currently generating about 0.01 per unit of risk. If you would invest  2,779  in Abercrombie Fitch on October 11, 2024 and sell it today you would earn a total of  12,383  from holding Abercrombie Fitch or generate 445.59% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy66.26%
ValuesDaily Returns

Abercrombie Fitch  vs.  CP ALL Public

 Performance 
       Timeline  
Abercrombie Fitch 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Abercrombie Fitch are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Abercrombie Fitch is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.
CP ALL Public 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days CP ALL Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Abercrombie Fitch and CP ALL Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Abercrombie Fitch and CP ALL

The main advantage of trading using opposite Abercrombie Fitch and CP ALL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abercrombie Fitch position performs unexpectedly, CP ALL 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 CP ALL will offset losses from the drop in CP ALL's long position.
The idea behind Abercrombie Fitch and CP ALL Public 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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