Correlation Between Carters and Rocky Brands
Can any of the company-specific risk be diversified away by investing in both Carters and Rocky Brands 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 Carters and Rocky Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carters and Rocky Brands, you can compare the effects of market volatilities on Carters and Rocky Brands 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 Carters with a short position of Rocky Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carters and Rocky Brands.
Diversification Opportunities for Carters and Rocky Brands
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Carters and Rocky is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Carters and Rocky Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rocky Brands and Carters 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 Carters are associated (or correlated) with Rocky Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rocky Brands has no effect on the direction of Carters i.e., Carters and Rocky Brands go up and down completely randomly.
Pair Corralation between Carters and Rocky Brands
Considering the 90-day investment horizon Carters is expected to under-perform the Rocky Brands. But the stock apears to be less risky and, when comparing its historical volatility, Carters is 2.27 times less risky than Rocky Brands. The stock trades about -0.01 of its potential returns per unit of risk. The Rocky Brands is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,368 in Rocky Brands on September 24, 2024 and sell it today you would lose (97.00) from holding Rocky Brands or give up 4.1% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Carters vs. Rocky Brands
Performance |
Timeline |
Carters |
Rocky Brands |
Carters and Rocky Brands Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Carters and Rocky Brands
The main advantage of trading using opposite Carters and Rocky Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carters position performs unexpectedly, Rocky Brands 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 Rocky Brands will offset losses from the drop in Rocky Brands' long position.Carters vs. Amer Sports, | Carters vs. Brunswick | Carters vs. BRP Inc | Carters vs. Vision Marine Technologies |
Rocky Brands vs. Weyco Group | Rocky Brands vs. Caleres | Rocky Brands vs. Designer Brands | Rocky Brands vs. Vera Bradley |
Check out your portfolio center.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.
Other Complementary Tools
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Global Correlations Find global opportunities by holding instruments from different markets | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |