Correlation Between Vince Holding and Unifi

Can any of the company-specific risk be diversified away by investing in both Vince Holding and Unifi 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 Unifi 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 Unifi Inc, you can compare the effects of market volatilities on Vince Holding and Unifi 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 Unifi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vince Holding and Unifi.

Diversification Opportunities for Vince Holding and Unifi

0.54

Correlation Coefficient

Vince Holding  Unifi

Very weak diversification

The 3 months correlation between Vince and Unifi is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Vince Holding Corp and Unifi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unifi Inc 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 Unifi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unifi Inc has no effect on the direction of Vince Holding i.e., Vince Holding and Unifi go up and down completely randomly.

Pair Corralation between Vince Holding and Unifi

Given the investment horizon of 90 days Vince Holding Corp is expected to under-perform the Unifi. In addition to that, Vince Holding is 3.02 times more volatile than Unifi Inc. It trades about -0.05 of its total potential returns per unit of risk. Unifi Inc is currently generating about -0.07 per unit of volatility. If you would invest  575.00  in Unifi Inc on December 26, 2024 and sell it today you would lose (95.00) from holding Unifi Inc or give up 16.52% of portfolio value over 90 days.

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

Vince Holding Corp  vs.  Unifi Inc

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 unfluctuating 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.

Unifi Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Unifi Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's technical and fundamental 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 Unifi

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

The idea behind Vince Holding Corp and Unifi Inc 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.