Correlation Between Victorias Secret and Albertsons Companies

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

By analyzing existing cross correlation between Victorias Secret Co and Albertsons Companies, you can compare the effects of market volatilities on Victorias Secret and Albertsons Companies 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 Victorias Secret with a short position of Albertsons Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victorias Secret and Albertsons Companies.

Diversification Opportunities for Victorias Secret and Albertsons Companies

-0.84

Correlation Coefficient

Victorias Secret  Albertsons Companies

Pay attention - limited upside

The 3 months correlation between Victorias and Albertsons is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Victorias Secret Co and Albertsons Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Albertsons Companies and Victorias Secret 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 Victorias Secret Co are associated (or correlated) with Albertsons Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Albertsons Companies has no effect on the direction of Victorias Secret i.e., Victorias Secret and Albertsons Companies go up and down completely randomly.

Pair Corralation between Victorias Secret and Albertsons Companies

Given the investment horizon of 90 days Victorias Secret Co is expected to under-perform the Albertsons Companies. In addition to that, Victorias Secret is 2.22 times more volatile than Albertsons Companies. It trades about -0.3 of its total potential returns per unit of risk. Albertsons Companies is currently generating about 0.09 per unit of volatility. If you would invest  1,948  in Albertsons Companies on December 22, 2024 and sell it today you would earn a total of  166.00  from holding Albertsons Companies or generate 8.52% return on investment over 90 days.

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

Victorias Secret Co  vs.  Albertsons Companies

Victorias Secret

Risk-Adjusted Performance

Very Weak

Over the last 90 days Victorias Secret Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Albertsons Companies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Albertsons Companies are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating fundamental indicators, Albertsons Companies may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Victorias Secret and Albertsons Companies

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

The idea behind Victorias Secret Co and Albertsons Companies 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.