Correlation Between YETI Holdings and PVH Corp

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

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

Diversification Opportunities for YETI Holdings and PVH Corp

0.85

Correlation Coefficient

YETI Holdings  PVH Corp

Very poor diversification

The 3 months correlation between YETI and PVH is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding YETI Holdings and PVH Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PVH 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 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 YETI Holdings i.e., YETI Holdings and PVH Corp go up and down completely randomly.

Pair Corralation between YETI Holdings and PVH Corp

Given the investment horizon of 90 days YETI Holdings is expected to generate 0.8 times more return on investment than PVH Corp. However, YETI Holdings is 1.25 times less risky than PVH Corp. It trades about -0.12 of its potential returns per unit of risk. PVH Corp is currently generating about -0.31 per unit of risk. If you would invest  3,938  in YETI Holdings on December 26, 2024 and sell it today you would lose (552.00) from holding YETI Holdings or give up 14.02% of portfolio value over 90 days.

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

YETI Holdings  vs.  PVH 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 fragile 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.

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 YETI Holdings and PVH Corp

The main advantage of trading using opposite YETI Holdings and PVH Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YETI Holdings 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 YETI Holdings 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.

Check out your portfolio center.

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 Commodity Directory module to find actively traded commodities issued by global exchanges.