Correlation Between Duluth Holdings and Amazon

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

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

Diversification Opportunities for Duluth Holdings and Amazon

-0.74

Correlation Coefficient

Duluth Holdings  Amazon

Pay attention - limited upside

The 3 months correlation between Duluth and Amazon is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Duluth Holdings and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc and Duluth 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 Duluth Holdings are associated (or correlated) with Amazon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon Inc has no effect on the direction of Duluth Holdings i.e., Duluth Holdings and Amazon go up and down completely randomly.

Pair Corralation between Duluth Holdings and Amazon

Given the investment horizon of 90 days Duluth Holdings is expected to under-perform the Amazon. In addition to that, Duluth Holdings is 1.54 times more volatile than Amazon Inc. It trades about -0.09 of its total potential returns per unit of risk. Amazon Inc is currently generating about 0.18 per unit of volatility. If you would invest  19,160  in Amazon Inc on September 20, 2024 and sell it today you would earn a total of  3,955  from holding Amazon Inc or generate 20.64% return on investment over 90 days.

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

Duluth Holdings  vs.  Amazon Inc

Duluth Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Duluth Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Amazon Inc

Risk-Adjusted Performance

14 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Amazon Inc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Amazon displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Duluth Holdings and Amazon

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

The idea behind Duluth Holdings and Amazon Inc 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.