Correlation Between Leslies and Polished
Can any of the company-specific risk be diversified away by investing in both Leslies and Polished 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 Leslies and Polished into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leslies and Polished, you can compare the effects of market volatilities on Leslies and Polished 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 Leslies with a short position of Polished. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leslies and Polished.
Diversification Opportunities for Leslies and Polished
Good diversification
The 3 months correlation between Leslies and Polished is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Leslies and Polished in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polished and Leslies 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 Leslies are associated (or correlated) with Polished. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polished has no effect on the direction of Leslies i.e., Leslies and Polished go up and down completely randomly.
Pair Corralation between Leslies and Polished
If you would invest 54.00 in Polished on September 25, 2024 and sell it today you would earn a total of 0.00 from holding Polished or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 5.0% |
Values | Daily Returns |
Leslies vs. Polished
Performance |
Timeline |
Leslies |
Polished |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Leslies and Polished Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Leslies and Polished
The main advantage of trading using opposite Leslies and Polished positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leslies position performs unexpectedly, Polished 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 Polished will offset losses from the drop in Polished's long position.Leslies vs. Sally Beauty Holdings | Leslies vs. ODP Corp | Leslies vs. 1 800 FLOWERSCOM | Leslies vs. Caseys General Stores |
Polished vs. Sally Beauty Holdings | Polished vs. National Vision Holdings | Polished vs. Big 5 Sporting | Polished vs. Pet Acquisition LLC |
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 the Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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