Correlation Between Aritzia and CSL

Can any of the company-specific risk be diversified away by investing in both Aritzia and CSL 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 Aritzia and CSL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aritzia and CSL, you can compare the effects of market volatilities on Aritzia and CSL 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 Aritzia with a short position of CSL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aritzia and CSL.

Diversification Opportunities for Aritzia and CSL

0.39

Correlation Coefficient

Aritzia  CSL

Weak diversification

The 3 months correlation between Aritzia and CSL is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Aritzia and CSL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL and Aritzia 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 Aritzia are associated (or correlated) with CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL has no effect on the direction of Aritzia i.e., Aritzia and CSL go up and down completely randomly.

Pair Corralation between Aritzia and CSL

Assuming the 90 days horizon Aritzia is expected to generate 1.84 times more return on investment than CSL. However, Aritzia is 1.84 times more volatile than CSL. It trades about 0.29 of its potential returns per unit of risk. CSL is currently generating about 0.13 per unit of risk. If you would invest  3,414  in Aritzia on April 24, 2025 and sell it today you would earn a total of  2,075  from holding Aritzia or generate 60.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Aritzia  vs.  CSL

Aritzia

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Aritzia are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Aritzia reported solid returns over the last few months and may actually be approaching a breakup point.

CSL

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CSL are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile essential indicators, CSL may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Aritzia and CSL

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

The idea behind Aritzia and CSL 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.