Correlation Between Duluth Holdings and ADVA Optical

Can any of the company-specific risk be diversified away by investing in both Duluth Holdings and ADVA Optical 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 Duluth Holdings and ADVA Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Duluth Holdings and ADVA Optical

0.0

Correlation Coefficient

Duluth Holdings  ADVA Optical

Pay attention - limited upside

The 3 months correlation between Duluth and ADVA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Duluth Holdings and ADVA Optical Networking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADVA Optical Networking and Duluth Holdings 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 Duluth Holdings are associated (or correlated) with ADVA Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADVA Optical Networking has no effect on the direction of Duluth Holdings i.e., Duluth Holdings and ADVA Optical go up and down completely randomly.

Pair Corralation between Duluth Holdings and ADVA Optical

If you would invest  2,056  in ADVA Optical Networking on December 28, 2024 and sell it today you would earn a total of  0.00  from holding ADVA Optical Networking or generate 0.0% return on investment over 90 days.

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

Duluth Holdings  vs.  ADVA Optical Networking

Duluth Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Duluth Holdings 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 basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

ADVA Optical Networking

Risk-Adjusted Performance

Very Weak

Over the last 90 days ADVA Optical Networking has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ADVA Optical is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Duluth Holdings and ADVA Optical

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

The idea behind Duluth Holdings and ADVA Optical Networking 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.

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 Money Managers module to screen money managers from public funds and ETFs managed around the world.