Correlation Between Amer Sports, and Vince Holding

Can any of the company-specific risk be diversified away by investing in both Amer Sports, and Vince Holding 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 Amer Sports, and Vince Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Amer Sports, and Vince Holding Corp, you can compare the effects of market volatilities on Amer Sports, and Vince Holding 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 Amer Sports, with a short position of Vince Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amer Sports, and Vince Holding.

Diversification Opportunities for Amer Sports, and Vince Holding

0.07

Correlation Coefficient

Amer Sports,  Vince Holding

Significant diversification

The 3 months correlation between Amer and Vince is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Amer Sports, and Vince Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vince Holding Corp and Amer Sports, 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 Amer Sports, are associated (or correlated) with Vince Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vince Holding Corp has no effect on the direction of Amer Sports, i.e., Amer Sports, and Vince Holding go up and down completely randomly.

Pair Corralation between Amer Sports, and Vince Holding

Allowing for the 90-day total investment horizon Amer Sports, is expected to generate 9.32 times less return on investment than Vince Holding. But when comparing it to its historical volatility, Amer Sports, is 9.95 times less risky than Vince Holding. It trades about 0.32 of its potential returns per unit of risk. Vince Holding Corp is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  170.00  in Vince Holding Corp on September 23, 2024 and sell it today you would earn a total of  312.00  from holding Vince Holding Corp or generate 183.53% return on investment over 90 days.

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

Amer Sports,  vs.  Vince Holding Corp

Amer Sports,

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amer Sports, are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Amer Sports, unveiled solid returns over the last few months and may actually be approaching a breakup point.

Vince Holding Corp

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vince Holding Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, Vince Holding exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amer Sports, and Vince Holding

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

The idea behind Amer Sports, and Vince Holding Corp 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.