Correlation Between Lakeland Industries and Talon International

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

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

Diversification Opportunities for Lakeland Industries and Talon International

-0.45

Correlation Coefficient

Lakeland Industries  Talon International

Very good diversification

The 3 months correlation between Lakeland and Talon is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Lakeland Industries and Talon International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talon International and Lakeland 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 Lakeland Industries are associated (or correlated) with Talon International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Talon International has no effect on the direction of Lakeland Industries i.e., Lakeland Industries and Talon International go up and down completely randomly.

Pair Corralation between Lakeland Industries and Talon International

If you would invest  2,038  in Lakeland Industries on September 15, 2024 and sell it today you would earn a total of  232.00  from holding Lakeland Industries or generate 11.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Lakeland Industries  vs.  Talon International

Lakeland Industries

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lakeland Industries are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady forward-looking signals, Lakeland Industries may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Talon International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Talon International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Talon International is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Lakeland Industries and Talon International

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

The idea behind Lakeland Industries and Talon International 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..