Correlation Between Card Factory and Leslies
Can any of the company-specific risk be diversified away by investing in both Card Factory 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 Card Factory and Leslies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Card Factory plc and Leslies, you can compare the effects of market volatilities on Card Factory 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 Card Factory with a short position of Leslies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Card Factory and Leslies.
Diversification Opportunities for Card Factory and Leslies
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Card and Leslies is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Card Factory plc and Leslies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leslies and Card Factory 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 Card Factory plc 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 Card Factory i.e., Card Factory and Leslies go up and down completely randomly.
Pair Corralation between Card Factory and Leslies
Assuming the 90 days horizon Card Factory plc is expected to under-perform the Leslies. But the pink sheet apears to be less risky and, when comparing its historical volatility, Card Factory plc is 1.05 times less risky than Leslies. The pink sheet trades about -0.2 of its potential returns per unit of risk. The Leslies is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 288.00 in Leslies on August 28, 2024 and sell it today you would earn a total of 63.00 from holding Leslies or generate 21.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Card Factory plc vs. Leslies
Performance |
| Timeline |
| Card Factory plc |
| Leslies |
Card Factory and Leslies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Card Factory and Leslies
The main advantage of trading using opposite Card Factory and Leslies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Card Factory 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.| Card Factory vs. Dixons Carphone plc | Card Factory vs. Ceconomy AG ADR | Card Factory vs. Tandy Leather Factory | Card Factory vs. Green River Gold |
| Leslies vs. Sally Beauty Holdings | Leslies vs. ODP Corp | Leslies vs. 1 800 FLOWERSCOM | Leslies vs. Caseys General Stores |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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