Correlation Between Falcons Beyond and Victorias Secret

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

By analyzing existing cross correlation between Falcons Beyond Global, and Victorias Secret Co, you can compare the effects of market volatilities on Falcons Beyond and Victorias Secret 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 Falcons Beyond with a short position of Victorias Secret. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcons Beyond and Victorias Secret.

Diversification Opportunities for Falcons Beyond and Victorias Secret

-0.45

Correlation Coefficient

Falcons Beyond  Victorias Secret

Very good diversification

The 3 months correlation between Falcons and Victorias is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Falcons Beyond Global, and Victorias Secret Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victorias Secret and Falcons Beyond 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 Falcons Beyond Global, are associated (or correlated) with Victorias Secret. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victorias Secret has no effect on the direction of Falcons Beyond i.e., Falcons Beyond and Victorias Secret go up and down completely randomly.

Pair Corralation between Falcons Beyond and Victorias Secret

Given the investment horizon of 90 days Falcons Beyond Global, is expected to generate 1.99 times more return on investment than Victorias Secret. However, Falcons Beyond is 1.99 times more volatile than Victorias Secret Co. It trades about 0.02 of its potential returns per unit of risk. Victorias Secret Co is currently generating about -0.3 per unit of risk. If you would invest  891.00  in Falcons Beyond Global, on December 21, 2024 and sell it today you would lose (51.00) from holding Falcons Beyond Global, or give up 5.72% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Falcons Beyond Global,  vs.  Victorias Secret Co

Falcons Beyond Global,

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Falcons Beyond Global, are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Falcons Beyond may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Victorias Secret

Risk-Adjusted Performance

Very Weak

Over the last 90 days Victorias Secret Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Falcons Beyond and Victorias Secret

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

The idea behind Falcons Beyond Global, and Victorias Secret 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.