Correlation Between PVH Corp and 465685AH8

Can any of the company-specific risk be diversified away by investing in both PVH Corp and 465685AH8 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 465685AH8 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PVH Corp and ITC HLDGS P, you can compare the effects of market volatilities on PVH Corp and 465685AH8 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 465685AH8. Check out your portfolio center. Please also check ongoing floating volatility patterns of PVH Corp and 465685AH8.

Diversification Opportunities for PVH Corp and 465685AH8

-0.24

Correlation Coefficient

PVH Corp  465685AH8

Very good diversification

The 3 months correlation between PVH and 465685AH8 is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding PVH Corp and ITC HLDGS P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITC HLDGS P 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 465685AH8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITC HLDGS P has no effect on the direction of PVH Corp i.e., PVH Corp and 465685AH8 go up and down completely randomly.

Pair Corralation between PVH Corp and 465685AH8

Considering the 90-day investment horizon PVH Corp is expected to generate 119.03 times less return on investment than 465685AH8. But when comparing it to its historical volatility, PVH Corp is 48.64 times less risky than 465685AH8. It trades about 0.04 of its potential returns per unit of risk. ITC HLDGS P is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  9,414  in ITC HLDGS P on September 2, 2024 and sell it today you would lose (654.00) from holding ITC HLDGS P or give up 6.95% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	40.93%
Values	Daily Returns

PVH Corp  vs.  ITC HLDGS P

PVH Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PVH Corp are ranked lower than 8 (%) 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 January 2025.

ITC HLDGS P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ITC HLDGS P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Bond's basic indicators remain somewhat 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 ITC HLDGS P investors.

Pair Trading with PVH Corp and 465685AH8

The main advantage of trading using opposite PVH Corp and 465685AH8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PVH Corp position performs unexpectedly, 465685AH8 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 465685AH8 will offset losses from the drop in 465685AH8's long position.

The idea behind PVH Corp and ITC HLDGS P 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.