Correlation Between Naked Brand and Delta Apparel

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Can any of the company-specific risk be diversified away by investing in both Naked Brand and Delta Apparel 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 Delta Apparel 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 Delta Apparel, you can compare the effects of market volatilities on Naked Brand and Delta Apparel 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 Delta Apparel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naked Brand and Delta Apparel.

Diversification Opportunities for Naked Brand and Delta Apparel

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Naked Brand and Delta Apparel

If you would invest (100.00) in Naked Brand Group on December 30, 2023 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 Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Naked Brand Group  vs.  Delta Apparel

 Performance 
       Timeline  
Naked Brand Group 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Naked Brand Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward-looking signals, Naked Brand is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
Delta Apparel 

Risk-Adjusted Performance

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Low
 
High
Very Weak
Over the last 90 days Delta Apparel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential indicators remain somewhat strong which may send shares a bit higher in April 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Naked Brand and Delta Apparel Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Naked Brand and Delta Apparel

The main advantage of trading using opposite Naked Brand and Delta Apparel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naked Brand position performs unexpectedly, Delta Apparel 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 Delta Apparel will offset losses from the drop in Delta Apparel's long position.
The idea behind Naked Brand Group and Delta Apparel 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 Commodity Directory module to find actively traded commodities issued by global exchanges.

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