Correlation Between PVH Corp and 50249AAF0

Can any of the company-specific risk be diversified away by investing in both PVH Corp and 50249AAF0 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 50249AAF0 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PVH Corp and LYB 125 01 OCT 25, you can compare the effects of market volatilities on PVH Corp and 50249AAF0 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 50249AAF0. Check out your portfolio center. Please also check ongoing floating volatility patterns of PVH Corp and 50249AAF0.

Diversification Opportunities for PVH Corp and 50249AAF0

-0.17

Correlation Coefficient

PVH Corp  50249AAF0

Good diversification

The 3 months correlation between PVH and 50249AAF0 is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding PVH Corp and LYB 125 01 OCT 25 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LYB 125 01 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 50249AAF0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LYB 125 01 has no effect on the direction of PVH Corp i.e., PVH Corp and 50249AAF0 go up and down completely randomly.

Pair Corralation between PVH Corp and 50249AAF0

Considering the 90-day investment horizon PVH Corp is expected to generate 1.78 times more return on investment than 50249AAF0. However, PVH Corp is 1.78 times more volatile than LYB 125 01 OCT 25. It trades about 0.0 of its potential returns per unit of risk. LYB 125 01 OCT 25 is currently generating about -0.24 per unit of risk. If you would invest  10,807  in PVH Corp on October 9, 2024 and sell it today you would lose (29.00) from holding PVH Corp or give up 0.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	84.21%
Values	Daily Returns

PVH Corp  vs.  LYB 125 01 OCT 25

PVH Corp

Risk-Adjusted Performance

8 of 100

Modest

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 February 2025.

LYB 125 01

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days LYB 125 01 OCT 25 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 50249AAF0 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with PVH Corp and 50249AAF0

The main advantage of trading using opposite PVH Corp and 50249AAF0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PVH Corp position performs unexpectedly, 50249AAF0 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 50249AAF0 will offset losses from the drop in 50249AAF0's long position.

The idea behind PVH Corp and LYB 125 01 OCT 25 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.