Correlation Between Ralph Lauren and Code Green

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

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

Diversification Opportunities for Ralph Lauren and Code Green

0.15

Correlation Coefficient

Ralph Lauren  Code Green

Average diversification

The 3 months correlation between Ralph and Code is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Ralph Lauren Corp and Code Green Apparel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Code Green Apparel and Ralph Lauren 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 Ralph Lauren Corp are associated (or correlated) with Code Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Code Green Apparel has no effect on the direction of Ralph Lauren i.e., Ralph Lauren and Code Green go up and down completely randomly.

Pair Corralation between Ralph Lauren and Code Green

Allowing for the 90-day total investment horizon Ralph Lauren is expected to generate 9.84 times less return on investment than Code Green. But when comparing it to its historical volatility, Ralph Lauren Corp is 12.1 times less risky than Code Green. It trades about 0.08 of its potential returns per unit of risk. Code Green Apparel is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  0.03  in Code Green Apparel on May 11, 2025 and sell it today you would lose (0.01) from holding Code Green Apparel or give up 33.33% of portfolio value over 90 days.

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

Ralph Lauren Corp  vs.  Code Green Apparel

Ralph Lauren Corp

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Ralph Lauren Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating essential indicators, Ralph Lauren may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Code Green Apparel

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Code Green Apparel are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Code Green exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ralph Lauren and Code Green

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

The idea behind Ralph Lauren Corp and Code Green Apparel 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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.