Correlation Between Buckle and Express

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

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

Diversification Opportunities for Buckle and Express

-0.16

Correlation Coefficient

Buckle  Express

Good diversification

The 3 months correlation between Buckle and Express is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Buckle Inc and Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Express and Buckle 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 Buckle Inc are associated (or correlated) with Express. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Express has no effect on the direction of Buckle i.e., Buckle and Express go up and down completely randomly.

Pair Corralation between Buckle and Express

If you would invest  4,155  in Buckle Inc on August 30, 2024 and sell it today you would earn a total of  969.00  from holding Buckle Inc or generate 23.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Buckle Inc  vs.  Express

Buckle Inc

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Buckle Inc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak forward-looking signals, Buckle exhibited solid returns over the last few months and may actually be approaching a breakup point.

Express

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Express has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Express is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Buckle and Express

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

The idea behind Buckle Inc and Express 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.