Correlation Between Fiskars Oyj and Lowes Companies
Can any of the company-specific risk be diversified away by investing in both Fiskars Oyj and Lowes Companies 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 Fiskars Oyj and Lowes Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fiskars Oyj Abp and Lowes Companies, you can compare the effects of market volatilities on Fiskars Oyj and Lowes Companies 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 Fiskars Oyj with a short position of Lowes Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiskars Oyj and Lowes Companies.
Diversification Opportunities for Fiskars Oyj and Lowes Companies
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fiskars and Lowes is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Fiskars Oyj Abp and Lowes Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lowes Companies and Fiskars Oyj 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 Fiskars Oyj Abp are associated (or correlated) with Lowes Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lowes Companies has no effect on the direction of Fiskars Oyj i.e., Fiskars Oyj and Lowes Companies go up and down completely randomly.
Pair Corralation between Fiskars Oyj and Lowes Companies
Assuming the 90 days horizon Fiskars Oyj Abp is expected to under-perform the Lowes Companies. But the stock apears to be less risky and, when comparing its historical volatility, Fiskars Oyj Abp is 1.35 times less risky than Lowes Companies. The stock trades about -0.11 of its potential returns per unit of risk. The Lowes Companies is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 23,915 in Lowes Companies on September 1, 2024 and sell it today you would earn a total of 1,800 from holding Lowes Companies or generate 7.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Fiskars Oyj Abp vs. Lowes Companies
Performance |
| Timeline |
| Fiskars Oyj Abp |
| Lowes Companies |
Fiskars Oyj and Lowes Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fiskars Oyj and Lowes Companies
The main advantage of trading using opposite Fiskars Oyj and Lowes Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiskars Oyj position performs unexpectedly, Lowes Companies 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 Lowes Companies will offset losses from the drop in Lowes Companies' long position.| Fiskars Oyj vs. Wyndham Hotels Resorts | Fiskars Oyj vs. Verizon Communications | Fiskars Oyj vs. MELIA HOTELS | Fiskars Oyj vs. INTERCONT HOTELS |
| Lowes Companies vs. EVS Broadcast Equipment | Lowes Companies vs. Air Transport Services | Lowes Companies vs. SIEM OFFSHORE NEW | Lowes Companies vs. TEXAS ROADHOUSE |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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