Correlation Between High Performance and Critic Clothing

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Can any of the company-specific risk be diversified away by investing in both High Performance and Critic Clothing 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 High Performance and Critic Clothing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between High Performance Beverages and Critic Clothing, you can compare the effects of market volatilities on High Performance and Critic Clothing 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 High Performance with a short position of Critic Clothing. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Performance and Critic Clothing.

Diversification Opportunities for High Performance and Critic Clothing

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between High Performance and Critic Clothing

If you would invest  0.48  in Critic Clothing on September 2, 2025 and sell it today you would earn a total of  0.12  from holding Critic Clothing or generate 25.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy96.92%
ValuesDaily Returns

High Performance Beverages  vs.  Critic Clothing

 Performance 
       Timeline  
High Performance Bev 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days High Performance Beverages has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, High Performance is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
Critic Clothing 

Risk-Adjusted Performance

Fair

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Critic Clothing are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Critic Clothing reported solid returns over the last few months and may actually be approaching a breakup point.

High Performance and Critic Clothing Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with High Performance and Critic Clothing

The main advantage of trading using opposite High Performance and Critic Clothing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Performance position performs unexpectedly, Critic Clothing 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 Critic Clothing will offset losses from the drop in Critic Clothing's long position.
The idea behind High Performance Beverages and Critic Clothing 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

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