Correlation Between Fossil and LightInTheBox Holding

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

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

Diversification Opportunities for Fossil and LightInTheBox Holding

0.43

Correlation Coefficient

Fossil  LightInTheBox Holding

Very weak diversification

The 3 months correlation between Fossil and LightInTheBox is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Fossil Group and LightInTheBox Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LightInTheBox Holding and Fossil 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 Fossil Group are associated (or correlated) with LightInTheBox Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LightInTheBox Holding has no effect on the direction of Fossil i.e., Fossil and LightInTheBox Holding go up and down completely randomly.

Pair Corralation between Fossil and LightInTheBox Holding

Given the investment horizon of 90 days Fossil Group is expected to generate 1.03 times more return on investment than LightInTheBox Holding. However, Fossil is 1.03 times more volatile than LightInTheBox Holding Co. It trades about 0.11 of its potential returns per unit of risk. LightInTheBox Holding Co is currently generating about 0.04 per unit of risk. If you would invest  125.00  in Fossil Group on May 8, 2025 and sell it today you would earn a total of  38.00  from holding Fossil Group or generate 30.4% return on investment over 90 days.

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

Fossil Group  vs.  LightInTheBox Holding Co

Fossil Group

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Fossil Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal basic indicators, Fossil disclosed solid returns over the last few months and may actually be approaching a breakup point.

LightInTheBox Holding

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LightInTheBox Holding Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, LightInTheBox Holding sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fossil and LightInTheBox Holding

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

The idea behind Fossil Group and LightInTheBox Holding Co 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.