Correlation Between VOXX International and PVH Corp

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

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

Diversification Opportunities for VOXX International and PVH Corp

0.41

Correlation Coefficient

VOXX International  PVH Corp

Very weak diversification

The 3 months correlation between VOXX and PVH is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding VOXX International and PVH Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PVH Corp and VOXX International 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 VOXX International 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 VOXX International i.e., VOXX International and PVH Corp go up and down completely randomly.

Pair Corralation between VOXX International and PVH Corp

Given the investment horizon of 90 days VOXX International is expected to generate 3.76 times more return on investment than PVH Corp. However, VOXX International is 3.76 times more volatile than PVH Corp. It trades about 0.13 of its potential returns per unit of risk. PVH Corp is currently generating about 0.02 per unit of risk. If you would invest  273.00  in VOXX International on September 29, 2024 and sell it today you would earn a total of  456.00  from holding VOXX International or generate 167.03% return on investment over 90 days.

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

VOXX International  vs.  PVH Corp

VOXX International

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in VOXX International are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, VOXX International showed solid returns over the last few months and may actually be approaching a breakup point.

PVH Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PVH Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, PVH Corp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with VOXX International and PVH Corp

The main advantage of trading using opposite VOXX International and PVH Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VOXX International 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 VOXX International 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.