Correlation Between MASSIN and Victorias Secret

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

By analyzing existing cross correlation between MASSIN 3067 01 APR 52 and Victorias Secret Co, you can compare the effects of market volatilities on MASSIN and Victorias Secret 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 MASSIN with a short position of Victorias Secret. Check out your portfolio center. Please also check ongoing floating volatility patterns of MASSIN and Victorias Secret.

Diversification Opportunities for MASSIN and Victorias Secret

-0.48

Correlation Coefficient

MASSIN  Victorias Secret

Very good diversification

The 3 months correlation between MASSIN and Victorias is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding MASSIN 3067 01 APR 52 and Victorias Secret Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victorias Secret and MASSIN 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 MASSIN 3067 01 APR 52 are associated (or correlated) with Victorias Secret. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victorias Secret has no effect on the direction of MASSIN i.e., MASSIN and Victorias Secret go up and down completely randomly.

Pair Corralation between MASSIN and Victorias Secret

Assuming the 90 days trading horizon MASSIN 3067 01 APR 52 is expected to under-perform the Victorias Secret. In addition to that, MASSIN is 1.27 times more volatile than Victorias Secret Co. It trades about -0.01 of its total potential returns per unit of risk. Victorias Secret Co is currently generating about 0.25 per unit of volatility. If you would invest  2,619  in Victorias Secret Co on September 21, 2024 and sell it today you would earn a total of  1,623  from holding Victorias Secret Co or generate 61.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	57.14%
Values	Daily Returns

MASSIN 3067 01 APR 52  vs.  Victorias Secret Co

MASSIN 3067 01

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MASSIN 3067 01 APR 52 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, MASSIN is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Victorias Secret

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Victorias Secret Co are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent fundamental indicators, Victorias Secret displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MASSIN and Victorias Secret

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

The idea behind MASSIN 3067 01 APR 52 and Victorias Secret Co 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.