Correlation Between Polished and Leslies

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

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

Diversification Opportunities for Polished and Leslies

-0.2

Correlation Coefficient

Polished  Leslies

Good diversification

The 3 months correlation between Polished and Leslies is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Polished and Leslies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leslies and Polished 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 Polished are associated (or correlated) with Leslies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leslies has no effect on the direction of Polished i.e., Polished and Leslies go up and down completely randomly.

Pair Corralation between Polished and Leslies

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

Polished  vs.  Leslies

Polished

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Polished has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Polished is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Leslies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Leslies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Polished and Leslies

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

The idea behind Polished and Leslies 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.