Correlation Between Destination and 655844CL0

Can any of the company-specific risk be diversified away by investing in both Destination and 655844CL0 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 Destination and 655844CL0 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Destination XL Group and NSC 29 25 AUG 51, you can compare the effects of market volatilities on Destination and 655844CL0 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 Destination with a short position of 655844CL0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Destination and 655844CL0.

Diversification Opportunities for Destination and 655844CL0

0.32

Correlation Coefficient

Destination  655844CL0

Weak diversification

The 3 months correlation between Destination and 655844CL0 is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Destination XL Group and NSC 29 25 AUG 51 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NSC 29 25 and Destination 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 Destination XL Group are associated (or correlated) with 655844CL0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NSC 29 25 has no effect on the direction of Destination i.e., Destination and 655844CL0 go up and down completely randomly.

Pair Corralation between Destination and 655844CL0

Given the investment horizon of 90 days Destination XL Group is expected to generate 2.01 times more return on investment than 655844CL0. However, Destination is 2.01 times more volatile than NSC 29 25 AUG 51. It trades about 0.13 of its potential returns per unit of risk. NSC 29 25 AUG 51 is currently generating about 0.19 per unit of risk. If you would invest  261.00  in Destination XL Group on October 23, 2024 and sell it today you would earn a total of  15.00  from holding Destination XL Group or generate 5.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	61.11%
Values	Daily Returns

Destination XL Group  vs.  NSC 29 25 AUG 51

Destination XL Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Destination XL Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak essential indicators, Destination may actually be approaching a critical reversion point that can send shares even higher in February 2025.

NSC 29 25

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NSC 29 25 AUG 51 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 655844CL0 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Destination and 655844CL0

The main advantage of trading using opposite Destination and 655844CL0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Destination position performs unexpectedly, 655844CL0 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 655844CL0 will offset losses from the drop in 655844CL0's long position.

The idea behind Destination XL Group and NSC 29 25 AUG 51 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.