Correlation Between Abercrombie Fitch and Quantumscape Corp
Can any of the company-specific risk be diversified away by investing in both Abercrombie Fitch and Quantumscape Corp 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 Abercrombie Fitch and Quantumscape Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abercrombie Fitch and Quantumscape Corp, you can compare the effects of market volatilities on Abercrombie Fitch and Quantumscape Corp 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 Abercrombie Fitch with a short position of Quantumscape Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abercrombie Fitch and Quantumscape Corp.
Diversification Opportunities for Abercrombie Fitch and Quantumscape Corp
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Abercrombie and Quantumscape is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Abercrombie Fitch and Quantumscape Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantumscape Corp and Abercrombie Fitch 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 Abercrombie Fitch are associated (or correlated) with Quantumscape Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantumscape Corp has no effect on the direction of Abercrombie Fitch i.e., Abercrombie Fitch and Quantumscape Corp go up and down completely randomly.
Pair Corralation between Abercrombie Fitch and Quantumscape Corp
Considering the 90-day investment horizon Abercrombie Fitch is expected to under-perform the Quantumscape Corp. But the stock apears to be less risky and, when comparing its historical volatility, Abercrombie Fitch is 1.07 times less risky than Quantumscape Corp. The stock trades about -0.1 of its potential returns per unit of risk. The Quantumscape Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 497.00 in Quantumscape Corp on March 15, 2025 and sell it today you would lose (61.00) from holding Quantumscape Corp or give up 12.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abercrombie Fitch vs. Quantumscape Corp
Performance |
| Timeline |
| Abercrombie Fitch |
| Quantumscape Corp |
Abercrombie Fitch and Quantumscape Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abercrombie Fitch and Quantumscape Corp
The main advantage of trading using opposite Abercrombie Fitch and Quantumscape Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abercrombie Fitch position performs unexpectedly, Quantumscape Corp 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 Quantumscape Corp will offset losses from the drop in Quantumscape Corp's long position.| Abercrombie Fitch vs. Urban Outfitters | Abercrombie Fitch vs. Foot Locker | Abercrombie Fitch vs. Childrens Place | Abercrombie Fitch vs. American Eagle Outfitters |
| Quantumscape Corp vs. Mobileye Global Class | Quantumscape Corp vs. Innoviz Technologies | Quantumscape Corp vs. Aeva Technologies, Common | Quantumscape Corp vs. Hyliion Holdings Corp |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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