Correlation Between Signet Jewelers and Camping World

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

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

Diversification Opportunities for Signet Jewelers and Camping World

0.37

Correlation Coefficient

Signet Jewelers  Camping World

Weak diversification

The 3 months correlation between Signet and Camping is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Signet Jewelers and Camping World Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camping World Holdings and Signet Jewelers 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 Signet Jewelers are associated (or correlated) with Camping World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camping World Holdings has no effect on the direction of Signet Jewelers i.e., Signet Jewelers and Camping World go up and down completely randomly.

Pair Corralation between Signet Jewelers and Camping World

Considering the 90-day investment horizon Signet Jewelers is expected to under-perform the Camping World. In addition to that, Signet Jewelers is 1.63 times more volatile than Camping World Holdings. It trades about -0.24 of its total potential returns per unit of risk. Camping World Holdings is currently generating about -0.12 per unit of volatility. If you would invest  2,373  in Camping World Holdings on December 2, 2024 and sell it today you would lose (424.00) from holding Camping World Holdings or give up 17.87% of portfolio value over 90 days.

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

Signet Jewelers  vs.  Camping World Holdings

Signet Jewelers

Risk-Adjusted Performance

Very Weak

Over the last 90 days Signet Jewelers 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 forward indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Camping World Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Camping World Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Signet Jewelers and Camping World

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

The idea behind Signet Jewelers and Camping World Holdings 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.