Correlation Between Naked Brand and Oxford Industries

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

Diversification Opportunities for Naked Brand and Oxford Industries

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Naked Brand and Oxford Industries

If you would invest  8,487  in Oxford Industries on December 30, 2023 and sell it today you would earn a total of  2,753  from holding Oxford Industries or generate 32.44% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Naked Brand Group  vs.  Oxford Industries

 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.
Oxford Industries 

Risk-Adjusted Performance

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OK
Compared to the overall equity markets, risk-adjusted returns on investments in Oxford Industries are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Oxford Industries displayed solid returns over the last few months and may actually be approaching a breakup point.

Naked Brand and Oxford Industries Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Naked Brand and Oxford Industries

The main advantage of trading using opposite Naked Brand and Oxford Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naked Brand position performs unexpectedly, Oxford Industries 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 Oxford Industries will offset losses from the drop in Oxford Industries' long position.
The idea behind Naked Brand Group and Oxford Industries 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

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