Correlation Between Oxford Industries and Childrens Place

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

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

Diversification Opportunities for Oxford Industries and Childrens Place

0.74

Correlation Coefficient

Oxford Industries  Childrens Place

Poor diversification

The 3 months correlation between Oxford and Childrens is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Industries and Childrens Place in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Childrens Place and Oxford Industries 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 Oxford Industries are associated (or correlated) with Childrens Place. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Childrens Place has no effect on the direction of Oxford Industries i.e., Oxford Industries and Childrens Place go up and down completely randomly.

Pair Corralation between Oxford Industries and Childrens Place

Considering the 90-day investment horizon Oxford Industries is expected to under-perform the Childrens Place. But the stock apears to be less risky and, when comparing its historical volatility, Oxford Industries is 1.98 times less risky than Childrens Place. The stock trades about -0.1 of its potential returns per unit of risk. The Childrens Place is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  542.00  in Childrens Place on May 7, 2025 and sell it today you would lose (86.00) from holding Childrens Place or give up 15.87% of portfolio value over 90 days.

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

Oxford Industries  vs.  Childrens Place

Oxford Industries

Risk-Adjusted Performance

Weakest

Over the last 90 days Oxford Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in September 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Childrens Place

Risk-Adjusted Performance

Weakest

Over the last 90 days Childrens Place has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Childrens Place is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Oxford Industries and Childrens Place

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

The idea behind Oxford Industries and Childrens Place 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.