Correlation Between Duluth Holdings and 191216DC1

Can any of the company-specific risk be diversified away by investing in both Duluth Holdings and 191216DC1 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 191216DC1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Duluth Holdings and COCA COLA CO, you can compare the effects of market volatilities on Duluth Holdings and 191216DC1 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 191216DC1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duluth Holdings and 191216DC1.

Diversification Opportunities for Duluth Holdings and 191216DC1

0.12

Correlation Coefficient

Duluth Holdings  191216DC1

Average diversification

The 3 months correlation between Duluth and 191216DC1 is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Duluth Holdings and COCA COLA CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COCA A CO 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 191216DC1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COCA A CO has no effect on the direction of Duluth Holdings i.e., Duluth Holdings and 191216DC1 go up and down completely randomly.

Pair Corralation between Duluth Holdings and 191216DC1

Given the investment horizon of 90 days Duluth Holdings is expected to under-perform the 191216DC1. In addition to that, Duluth Holdings is 1.62 times more volatile than COCA COLA CO. It trades about -0.06 of its total potential returns per unit of risk. COCA COLA CO is currently generating about 0.01 per unit of volatility. If you would invest  6,972  in COCA COLA CO on September 24, 2024 and sell it today you would lose (78.00) from holding COCA COLA CO or give up 1.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.58%
Values	Daily Returns

Duluth Holdings  vs.  COCA COLA CO

Duluth Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Duluth Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

COCA A CO

Risk-Adjusted Performance

3 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in COCA COLA CO are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 191216DC1 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Duluth Holdings and 191216DC1

The main advantage of trading using opposite Duluth Holdings and 191216DC1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duluth Holdings position performs unexpectedly, 191216DC1 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 191216DC1 will offset losses from the drop in 191216DC1's long position.

The idea behind Duluth Holdings and COCA COLA CO 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.