Correlation Between Apex Global and Destination

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Can any of the company-specific risk be diversified away by investing in both Apex Global and Destination 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 Apex Global and Destination into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apex Global Brands and Destination XL Group, you can compare the effects of market volatilities on Apex Global and Destination 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 Apex Global with a short position of Destination. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apex Global and Destination.

Diversification Opportunities for Apex Global and Destination

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Apex and Destination is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Apex Global Brands and Destination XL Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Destination XL Group and Apex Global 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 Apex Global Brands are associated (or correlated) with Destination. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Destination XL Group has no effect on the direction of Apex Global i.e., Apex Global and Destination go up and down completely randomly.

Pair Corralation between Apex Global and Destination

If you would invest (100.00) in Apex Global Brands on December 29, 2023 and sell it today you would earn a total of  100.00  from holding Apex Global Brands or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Apex Global Brands  vs.  Destination XL Group

 Performance 
       Timeline  
Apex Global Brands 

Risk-Adjusted Performance

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Over the last 90 days Apex Global Brands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward-looking signals, Apex Global is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.
Destination XL Group 

Risk-Adjusted Performance

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High
Very Weak
Over the last 90 days Destination XL Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in April 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Apex Global and Destination Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Apex Global and Destination

The main advantage of trading using opposite Apex Global and Destination positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apex Global position performs unexpectedly, Destination 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 Destination will offset losses from the drop in Destination's long position.
The idea behind Apex Global Brands and Destination XL Group 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

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