Correlation Between VF and Grounded People

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

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

Diversification Opportunities for VF and Grounded People

0.0

Correlation Coefficient

VF  Grounded People

Pay attention - limited upside

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

Pair Corralation between VF and Grounded People

If you would invest  2,125  in VF Corporation on October 10, 2024 and sell it today you would earn a total of  32.00  from holding VF Corporation or generate 1.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

VF Corp.  vs.  Grounded People Apparel

VF Corporation

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in VF Corporation are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent technical and fundamental indicators, VF may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Grounded People Apparel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grounded People Apparel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, Grounded People is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with VF and Grounded People

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

The idea behind VF Corporation and Grounded People Apparel 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 Stocks Directory module to find actively traded stocks across global markets.