Correlation Between Shoe Carnival and Harland John

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

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

Diversification Opportunities for Shoe Carnival and Harland John

0.0

Correlation Coefficient

Shoe Carnival  Harland John

Pay attention - limited upside

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

Pair Corralation between Shoe Carnival and Harland John

If you would invest (100.00) in Harland John H on October 3, 2024 and sell it today you would earn a total of  100.00  from holding Harland John H 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.  Harland John H

Shoe Carnival

Risk-Adjusted Performance

0 of 100

Very Weak

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

Harland John H

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harland John H has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Harland John is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Shoe Carnival and Harland John

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

The idea behind Shoe Carnival and Harland John H 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.