Correlation Between Apex Global and Francescas Holdings

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

Diversification Opportunities for Apex Global and Francescas Holdings

0.0

Correlation Coefficient

Apex Global  Francescas Holdings

Pay attention - limited upside

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

Pair Corralation between Apex Global and Francescas Holdings

If you would invest (100.00) in Francescas Holdings on February 1, 2024 and sell it today you would earn a total of  100.00  from holding Francescas Holdings or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Apex Global Brands  vs.  Francescas Holdings

Apex Global Brands

Risk-Adjusted Performance

0 of 100

Very Weak

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 newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Francescas Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Francescas Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Francescas Holdings is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Apex Global and Francescas Holdings

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

The idea behind Apex Global Brands and Francescas Holdings 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.