Correlation Between Disney and LOWES
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By analyzing existing cross correlation between Walt Disney and LOWES INC 405, you can compare the effects of market volatilities on Disney and LOWES 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 Disney with a short position of LOWES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and LOWES.
Diversification Opportunities for Disney and LOWES
Very good diversification
The 3 months correlation between Disney and LOWES is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and LOWES INC 405 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOWES INC 405 and Disney 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 Walt Disney are associated (or correlated) with LOWES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOWES INC 405 has no effect on the direction of Disney i.e., Disney and LOWES go up and down completely randomly.
Pair Corralation between Disney and LOWES
Considering the 90-day investment horizon Walt Disney is expected to generate 0.57 times more return on investment than LOWES. However, Walt Disney is 1.75 times less risky than LOWES. It trades about 0.31 of its potential returns per unit of risk. LOWES INC 405 is currently generating about 0.02 per unit of risk. If you would invest 10,086 in Walt Disney on September 12, 2024 and sell it today you would earn a total of 1,387 from holding Walt Disney or generate 13.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Walt Disney vs. LOWES INC 405
Performance |
| Timeline |
| Walt Disney |
| LOWES INC 405 |
Disney and LOWES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Disney and LOWES
The main advantage of trading using opposite Disney and LOWES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney position performs unexpectedly, LOWES 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 will offset losses from the drop in LOWES's long position.| Disney vs. Aeye Inc | Disney vs. Ep Emerging Markets | Disney vs. ALPS Emerging Sector | Disney vs. First Physicians Capital |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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