Correlation Between Abercrombie Fitch and EQV Ventures

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

By analyzing existing cross correlation between Abercrombie Fitch and EQV Ventures Acquisition, you can compare the effects of market volatilities on Abercrombie Fitch and EQV Ventures 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 EQV Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abercrombie Fitch and EQV Ventures.

Diversification Opportunities for Abercrombie Fitch and EQV Ventures

0.16

Correlation Coefficient

Abercrombie Fitch  EQV Ventures

Average diversification

The 3 months correlation between Abercrombie and EQV is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Abercrombie Fitch and EQV Ventures Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EQV Ventures Acquisition 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 EQV Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EQV Ventures Acquisition has no effect on the direction of Abercrombie Fitch i.e., Abercrombie Fitch and EQV Ventures go up and down completely randomly.

Pair Corralation between Abercrombie Fitch and EQV Ventures

Considering the 90-day investment horizon Abercrombie Fitch is expected to generate 24.22 times more return on investment than EQV Ventures. However, Abercrombie Fitch is 24.22 times more volatile than EQV Ventures Acquisition. It trades about 0.15 of its potential returns per unit of risk. EQV Ventures Acquisition is currently generating about 0.3 per unit of risk. If you would invest  14,007  in Abercrombie Fitch on October 10, 2024 and sell it today you would earn a total of  1,155  from holding Abercrombie Fitch or generate 8.25% return on investment over 90 days.

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

Abercrombie Fitch  vs.  EQV Ventures Acquisition

Abercrombie Fitch

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Abercrombie Fitch are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Abercrombie Fitch may actually be approaching a critical reversion point that can send shares even higher in February 2025.

EQV Ventures Acquisition

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in EQV Ventures Acquisition are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, EQV Ventures is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Abercrombie Fitch and EQV Ventures

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

The idea behind Abercrombie Fitch and EQV Ventures Acquisition 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.