Correlation Between Naked Brand and Carters
Can any of the company-specific risk be diversified away by investing in both Naked Brand and Carters 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 Naked Brand and Carters into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Naked Brand Group and Carters, you can compare the effects of market volatilities on Naked Brand and Carters 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 Naked Brand with a short position of Carters. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naked Brand and Carters.
Diversification Opportunities for Naked Brand and Carters
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Naked and Carters is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Naked Brand Group and Carters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carters and Naked Brand 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 Naked Brand Group are associated (or correlated) with Carters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carters has no effect on the direction of Naked Brand i.e., Naked Brand and Carters go up and down completely randomly.
Pair Corralation between Naked Brand and Carters
If you would invest (100.00) in Naked Brand Group on January 25, 2024 and sell it today you would earn a total of 100.00 from holding Naked Brand Group or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Naked Brand Group vs. Carters
Performance |
| Timeline |
| Naked Brand Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Carters |
Naked Brand and Carters Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Naked Brand and Carters
The main advantage of trading using opposite Naked Brand and Carters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naked Brand position performs unexpectedly, Carters 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 Carters will offset losses from the drop in Carters' long position.| Naked Brand vs. Boston Omaha Corp | Naked Brand vs. WT Offshore | Naked Brand vs. Stagwell | Naked Brand vs. Carters |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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