Correlation Between YETI Holdings and Acushnet Holdings

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

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

Diversification Opportunities for YETI Holdings and Acushnet Holdings

0.44

Correlation Coefficient

YETI Holdings  Acushnet Holdings

Very weak diversification

The 3 months correlation between YETI and Acushnet is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding YETI Holdings and Acushnet Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acushnet Holdings Corp and YETI Holdings 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 YETI Holdings are associated (or correlated) with Acushnet Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acushnet Holdings Corp has no effect on the direction of YETI Holdings i.e., YETI Holdings and Acushnet Holdings go up and down completely randomly.

Pair Corralation between YETI Holdings and Acushnet Holdings

Given the investment horizon of 90 days YETI Holdings is expected to under-perform the Acushnet Holdings. But the stock apears to be less risky and, when comparing its historical volatility, YETI Holdings is 1.09 times less risky than Acushnet Holdings. The stock trades about -0.1 of its potential returns per unit of risk. The Acushnet Holdings Corp is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  7,001  in Acushnet Holdings Corp on December 29, 2024 and sell it today you would lose (158.00) from holding Acushnet Holdings Corp or give up 2.26% of portfolio value over 90 days.

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

YETI Holdings  vs.  Acushnet Holdings Corp

YETI Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days YETI Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Acushnet Holdings Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Acushnet Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Acushnet Holdings is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with YETI Holdings and Acushnet Holdings

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

The idea behind YETI Holdings and Acushnet Holdings 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.