Correlation Between Advance Auto and Lazydays Holdings
Can any of the company-specific risk be diversified away by investing in both Advance Auto and Lazydays Holdings 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 Advance Auto and Lazydays Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advance Auto Parts and Lazydays Holdings, you can compare the effects of market volatilities on Advance Auto and Lazydays Holdings 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 Advance Auto with a short position of Lazydays Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advance Auto and Lazydays Holdings.
Diversification Opportunities for Advance Auto and Lazydays Holdings
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Advance and Lazydays is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Advance Auto Parts and Lazydays Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazydays Holdings and Advance Auto 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 Advance Auto Parts are associated (or correlated) with Lazydays Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazydays Holdings has no effect on the direction of Advance Auto i.e., Advance Auto and Lazydays Holdings go up and down completely randomly.
Pair Corralation between Advance Auto and Lazydays Holdings
Considering the 90-day investment horizon Advance Auto Parts is expected to generate 0.46 times more return on investment than Lazydays Holdings. However, Advance Auto Parts is 2.15 times less risky than Lazydays Holdings. It trades about 0.07 of its potential returns per unit of risk. Lazydays Holdings is currently generating about -0.03 per unit of risk. If you would invest 4,497 in Advance Auto Parts on October 7, 2024 and sell it today you would earn a total of 137.00 from holding Advance Auto Parts or generate 3.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advance Auto Parts vs. Lazydays Holdings
Performance |
| Timeline |
| Advance Auto Parts |
| Lazydays Holdings |
Advance Auto and Lazydays Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advance Auto and Lazydays Holdings
The main advantage of trading using opposite Advance Auto and Lazydays Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advance Auto position performs unexpectedly, Lazydays Holdings 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 Lazydays Holdings will offset losses from the drop in Lazydays Holdings' long position.| Advance Auto vs. ODP Corp | Advance Auto vs. Sally Beauty Holdings | Advance Auto vs. Winmark | Advance Auto vs. 1 800 FLOWERSCOM |
| Lazydays Holdings vs. Group 1 Automotive | Lazydays Holdings vs. Sonic Automotive | Lazydays Holdings vs. Penske Automotive Group | Lazydays Holdings vs. Asbury Automotive Group |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |