Correlation Between Shoe Carnival and Express

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

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

Diversification Opportunities for Shoe Carnival and Express

0.0

Correlation Coefficient

Shoe Carnival  Express

Pay attention - limited upside

The 3 months correlation between Shoe and Express is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Shoe Carnival and Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Express and Shoe Carnival 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 Shoe Carnival are associated (or correlated) with Express. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Express has no effect on the direction of Shoe Carnival i.e., Shoe Carnival and Express go up and down completely randomly.

Pair Corralation between Shoe Carnival and Express

If you would invest (100.00) in Express on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Express or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Shoe Carnival  vs.  Express

Shoe Carnival

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shoe Carnival has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Express

Risk-Adjusted Performance

Very Weak

Over the last 90 days Express has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Express is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Shoe Carnival and Express

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

The idea behind Shoe Carnival and Express 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.