Correlation Between Vince Holding and H M

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

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

Diversification Opportunities for Vince Holding and H M

0.53

Correlation Coefficient

Vince Holding  H M

Very weak diversification

The 3 months correlation between Vince and HMRZF is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Vince Holding Corp and H M Hennes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H M Hennes and Vince Holding 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 Vince Holding Corp are associated (or correlated) with H M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H M Hennes has no effect on the direction of Vince Holding i.e., Vince Holding and H M go up and down completely randomly.

Pair Corralation between Vince Holding and H M

Given the investment horizon of 90 days Vince Holding Corp is expected to generate 1.86 times more return on investment than H M. However, Vince Holding is 1.86 times more volatile than H M Hennes. It trades about -0.01 of its potential returns per unit of risk. H M Hennes is currently generating about -0.03 per unit of risk. If you would invest  176.00  in Vince Holding Corp on September 3, 2024 and sell it today you would lose (15.00) from holding Vince Holding Corp or give up 8.52% of portfolio value over 90 days.

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

Vince Holding Corp  vs.  H M Hennes

Vince Holding Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vince Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Vince Holding is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

H M Hennes

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days H M Hennes has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, H M is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Vince Holding and H M

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

The idea behind Vince Holding Corp and H M Hennes 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.