Correlation Between VF and H+M HEN+MAUUNSPADR

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

By analyzing existing cross correlation between VF Corporation and HM HENMAUUNSPADR 15, you can compare the effects of market volatilities on VF and H+M HEN+MAUUNSPADR 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 H+M HEN+MAUUNSPADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of VF and H+M HEN+MAUUNSPADR.

Diversification Opportunities for VF and H+M HEN+MAUUNSPADR

-0.36

Correlation Coefficient

VF  H+M HEN+MAUUNSPADR

Very good diversification

The 3 months correlation between VF and H+M is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding VF Corp. and HM HENMAUUNSPADR 15 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H+M HEN+MAUUNSPADR 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 H+M HEN+MAUUNSPADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H+M HEN+MAUUNSPADR has no effect on the direction of VF i.e., VF and H+M HEN+MAUUNSPADR go up and down completely randomly.

Pair Corralation between VF and H+M HEN+MAUUNSPADR

Assuming the 90 days horizon VF Corporation is expected to generate 1.51 times more return on investment than H+M HEN+MAUUNSPADR. However, VF is 1.51 times more volatile than HM HENMAUUNSPADR 15. It trades about 0.08 of its potential returns per unit of risk. HM HENMAUUNSPADR 15 is currently generating about -0.08 per unit of risk. If you would invest  1,895  in VF Corporation on September 4, 2024 and sell it today you would earn a total of  82.00  from holding VF Corporation or generate 4.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

VF Corp.  vs.  HM HENMAUUNSPADR 15

VF Corporation

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in VF Corporation are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, VF reported solid returns over the last few months and may actually be approaching a breakup point.

H+M HEN+MAUUNSPADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HM HENMAUUNSPADR 15 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, H+M HEN+MAUUNSPADR is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with VF and H+M HEN+MAUUNSPADR

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

The idea behind VF Corporation and HM HENMAUUNSPADR 15 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.