Correlation Between PVH Corp and ReposiTrak

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

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

Diversification Opportunities for PVH Corp and ReposiTrak

0.83

Correlation Coefficient

PVH Corp  ReposiTrak

Very poor diversification

The 3 months correlation between PVH and ReposiTrak is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding PVH Corp and ReposiTrak in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ReposiTrak and PVH Corp 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 PVH Corp are associated (or correlated) with ReposiTrak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ReposiTrak has no effect on the direction of PVH Corp i.e., PVH Corp and ReposiTrak go up and down completely randomly.

Pair Corralation between PVH Corp and ReposiTrak

Considering the 90-day investment horizon PVH Corp is expected to generate 0.59 times more return on investment than ReposiTrak. However, PVH Corp is 1.7 times less risky than ReposiTrak. It trades about -0.07 of its potential returns per unit of risk. ReposiTrak is currently generating about -0.06 per unit of risk. If you would invest  10,807  in PVH Corp on October 9, 2024 and sell it today you would lose (291.00) from holding PVH Corp or give up 2.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

PVH Corp  vs.  ReposiTrak

PVH Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PVH Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, PVH Corp may actually be approaching a critical reversion point that can send shares even higher in February 2025.

ReposiTrak

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ReposiTrak are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, ReposiTrak disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PVH Corp and ReposiTrak

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

The idea behind PVH Corp and ReposiTrak 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.