Correlation Between Camping World and Fox Factory

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

Diversification Opportunities for Camping World and Fox Factory

0.78
  Correlation Coefficient

Poor diversification

The 3 months correlation between Camping and Fox Factory is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Camping World Holdings and Fox Factory Cp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fox Factory Cp and Camping World 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 Camping World Holdings are associated (or correlated) with Fox Factory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fox Factory Cp has no effect on the direction of Camping World i.e., Camping World and Fox Factory go up and down completely randomly.

Pair Corralation between Camping World and Fox Factory

Considering the 90-day investment horizon Camping World Holdings is expected to generate 1.69 times more return on investment than Fox Factory. However, Camping World is 1.69 times more volatile than Fox Factory Cp. It trades about -0.02 of its potential returns per unit of risk. Fox Factory Cp is currently generating about -0.09 per unit of risk. If you would invest  2,847  in Camping World Holdings on July 6, 2022 and sell it today you would lose (117.00)  from holding Camping World Holdings or give up 4.11% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Camping World Holdings  vs.  Fox Factory Cp

 Performance (%) 
       Timeline  
Camping World Holdings 
Camping Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Camping World Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting basic indicators, Camping World reported solid returns over the last few months and may actually be approaching a breakup point.

Camping Price Channel

Fox Factory Cp 
Fox Factory Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Fox Factory Cp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Fox Factory is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Fox Factory Price Channel

Camping World and Fox Factory Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Camping World and Fox Factory

The main advantage of trading using opposite Camping World and Fox Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Camping World position performs unexpectedly, Fox Factory 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 Fox Factory will offset losses from the drop in Fox Factory's long position.
Camping World vs. Amazon Inc
The idea behind Camping World Holdings and Fox Factory Cp 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.
Fox Factory vs. Amazon Inc
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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