Correlation Between 191216DC1 and Duluth Holdings

Can any of the company-specific risk be diversified away by investing in both 191216DC1 and Duluth Holdings 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 191216DC1 and Duluth Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between COCA COLA CO and Duluth Holdings, you can compare the effects of market volatilities on 191216DC1 and Duluth Holdings 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 191216DC1 with a short position of Duluth Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of 191216DC1 and Duluth Holdings.

Diversification Opportunities for 191216DC1 and Duluth Holdings

0.05

Correlation Coefficient

191216DC1  Duluth Holdings

Significant diversification

The 3 months correlation between 191216DC1 and Duluth is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding COCA COLA CO and Duluth Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duluth Holdings and 191216DC1 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 COCA COLA CO are associated (or correlated) with Duluth Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duluth Holdings has no effect on the direction of 191216DC1 i.e., 191216DC1 and Duluth Holdings go up and down completely randomly.

Pair Corralation between 191216DC1 and Duluth Holdings

Assuming the 90 days trading horizon COCA COLA CO is expected to generate 0.66 times more return on investment than Duluth Holdings. However, COCA COLA CO is 1.52 times less risky than Duluth Holdings. It trades about 0.0 of its potential returns per unit of risk. Duluth Holdings is currently generating about -0.15 per unit of risk. If you would invest  6,448  in COCA COLA CO on October 12, 2024 and sell it today you would lose (66.00) from holding COCA COLA CO or give up 1.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	91.8%
Values	Daily Returns

COCA COLA CO  vs.  Duluth Holdings

COCA A CO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days COCA COLA CO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 191216DC1 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Duluth Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Duluth Holdings 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 fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with 191216DC1 and Duluth Holdings

The main advantage of trading using opposite 191216DC1 and Duluth Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 191216DC1 position performs unexpectedly, Duluth Holdings 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 Duluth Holdings will offset losses from the drop in Duluth Holdings' long position.

The idea behind COCA COLA CO and Duluth 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.