Correlation Between Floor Decor and LESLIES INC
Can any of the company-specific risk be diversified away by investing in both Floor Decor and LESLIES INC 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 Floor Decor and LESLIES INC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Floor Decor Holdings and LESLIES INC DL, you can compare the effects of market volatilities on Floor Decor and LESLIES INC 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 Floor Decor with a short position of LESLIES INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Floor Decor and LESLIES INC.
Diversification Opportunities for Floor Decor and LESLIES INC
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Floor and LESLIES is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Floor Decor Holdings and LESLIES INC DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LESLIES INC DL and Floor Decor 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 Floor Decor Holdings are associated (or correlated) with LESLIES INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LESLIES INC DL has no effect on the direction of Floor Decor i.e., Floor Decor and LESLIES INC go up and down completely randomly.
Pair Corralation between Floor Decor and LESLIES INC
Assuming the 90 days horizon Floor Decor Holdings is expected to generate 0.49 times more return on investment than LESLIES INC. However, Floor Decor Holdings is 2.03 times less risky than LESLIES INC. It trades about 0.0 of its potential returns per unit of risk. LESLIES INC DL is currently generating about -0.1 per unit of risk. If you would invest 9,800 in Floor Decor Holdings on October 19, 2024 and sell it today you would lose (100.00) from holding Floor Decor Holdings or give up 1.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Floor Decor Holdings vs. LESLIES INC DL
Performance |
| Timeline |
| Floor Decor Holdings |
| LESLIES INC DL |
Floor Decor and LESLIES INC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Floor Decor and LESLIES INC
The main advantage of trading using opposite Floor Decor and LESLIES INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Floor Decor position performs unexpectedly, LESLIES INC 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 INC will offset losses from the drop in LESLIES INC's long position.| Floor Decor vs. The Home Depot | Floor Decor vs. The Home Depot | Floor Decor vs. LESLIES INC DL | Floor Decor vs. HORNBACH Baumarkt AG |
| LESLIES INC vs. SOFI TECHNOLOGIES | LESLIES INC vs. ASPEN TECHINC DL | LESLIES INC vs. Kingdee International Software | LESLIES INC vs. BioNTech SE |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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