Correlation Between Figs and PVH Corp

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

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

Diversification Opportunities for Figs and PVH Corp

-0.44

Correlation Coefficient

Figs  PVH Corp

Very good diversification

The 3 months correlation between Figs and PVH is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Figs Inc and PVH Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PVH Corp and Figs 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 Figs Inc 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 Figs i.e., Figs and PVH Corp go up and down completely randomly.

Pair Corralation between Figs and PVH Corp

Given the investment horizon of 90 days Figs is expected to generate 2.52 times less return on investment than PVH Corp. In addition to that, Figs is 2.55 times more volatile than PVH Corp. It trades about 0.02 of its total potential returns per unit of risk. PVH Corp is currently generating about 0.14 per unit of volatility. If you would invest  9,372  in PVH Corp on September 12, 2024 and sell it today you would earn a total of  1,555  from holding PVH Corp or generate 16.59% return on investment over 90 days.

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

Figs Inc  vs.  PVH Corp

Figs Inc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Figs Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Figs may actually be approaching a critical reversion point that can send shares even higher in January 2025.

PVH Corp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PVH Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, PVH Corp demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Figs and PVH Corp

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

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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.