Correlation Between IMedia Brands and Fossil Group

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

By analyzing existing cross correlation between IMedia Brands 85 and Fossil Group 7, you can compare the effects of market volatilities on IMedia Brands and Fossil Group 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 IMedia Brands with a short position of Fossil Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of IMedia Brands and Fossil Group.

Diversification Opportunities for IMedia Brands and Fossil Group

0.15

Correlation Coefficient

IMedia Brands  Fossil Group

Average diversification

The 3 months correlation between IMedia and Fossil is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding IMedia Brands 85 and Fossil Group 7 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fossil Group 7 and IMedia Brands 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 IMedia Brands 85 are associated (or correlated) with Fossil Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fossil Group 7 has no effect on the direction of IMedia Brands i.e., IMedia Brands and Fossil Group go up and down completely randomly.

Pair Corralation between IMedia Brands and Fossil Group

If you would invest  98.00  in IMedia Brands 85 on September 29, 2024 and sell it today you would earn a total of  0.00  from holding IMedia Brands 85 or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

IMedia Brands 85  vs.  Fossil Group 7

IMedia Brands 85

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IMedia Brands 85 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward indicators, IMedia Brands is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Fossil Group 7

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fossil Group 7 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Fossil Group is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with IMedia Brands and Fossil Group

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

The idea behind IMedia Brands 85 and Fossil Group 7 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.