Correlation Between Foxx Development and Williams Sonoma

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

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

Diversification Opportunities for Foxx Development and Williams Sonoma

-0.49

Correlation Coefficient

Foxx Development  Williams Sonoma

Very good diversification

The 3 months correlation between Foxx and Williams is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Foxx Development Holdings and Williams Sonoma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Williams Sonoma and Foxx Development 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 Foxx Development Holdings are associated (or correlated) with Williams Sonoma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Williams Sonoma has no effect on the direction of Foxx Development i.e., Foxx Development and Williams Sonoma go up and down completely randomly.

Pair Corralation between Foxx Development and Williams Sonoma

Given the investment horizon of 90 days Foxx Development Holdings is expected to under-perform the Williams Sonoma. In addition to that, Foxx Development is 2.33 times more volatile than Williams Sonoma. It trades about -0.02 of its total potential returns per unit of risk. Williams Sonoma is currently generating about 0.07 per unit of volatility. If you would invest  14,719  in Williams Sonoma on September 24, 2024 and sell it today you would earn a total of  3,649  from holding Williams Sonoma or generate 24.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.21%
Values	Daily Returns

Foxx Development Holdings  vs.  Williams Sonoma

Foxx Development Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Foxx Development Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile 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 current disturbance may also be a sign of long term up-swing for the company investors.

Williams Sonoma

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Williams Sonoma are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Williams Sonoma displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Foxx Development and Williams Sonoma

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

The idea behind Foxx Development Holdings and Williams Sonoma 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.