Correlation Between Vince Holding and PVH Corp

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

By analyzing existing cross correlation between Vince Holding Corp and PVH Corp, you can compare the effects of market volatilities on Vince Holding and PVH Corp 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 Vince Holding with a short position of PVH Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vince Holding and PVH Corp.

Diversification Opportunities for Vince Holding and PVH Corp

0.77

Correlation Coefficient

Vince Holding  PVH Corp

Poor diversification

The 3 months correlation between Vince and PVH is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Vince Holding Corp and PVH Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PVH Corp and Vince Holding 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 Vince Holding Corp are associated (or correlated) with PVH Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PVH Corp has no effect on the direction of Vince Holding i.e., Vince Holding and PVH Corp go up and down completely randomly.

Pair Corralation between Vince Holding and PVH Corp

Given the investment horizon of 90 days Vince Holding Corp is expected to generate 4.18 times more return on investment than PVH Corp. However, Vince Holding is 4.18 times more volatile than PVH Corp. It trades about -0.05 of its potential returns per unit of risk. PVH Corp is currently generating about -0.31 per unit of risk. If you would invest  371.00  in Vince Holding Corp on December 26, 2024 and sell it today you would lose (166.00) from holding Vince Holding Corp or give up 44.74% of portfolio value over 90 days.

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

Vince Holding Corp  vs.  PVH Corp

Vince Holding Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vince Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

PVH Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days PVH Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady 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 Vince Holding and PVH Corp

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

The idea behind Vince Holding Corp and PVH Corp 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.