Correlation Between Duluth Holdings and Lands End
Can any of the company-specific risk be diversified away by investing in both Duluth Holdings and Lands End 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 Duluth Holdings and Lands End into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Duluth Holdings and Lands End, you can compare the effects of market volatilities on Duluth Holdings and Lands End 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 Duluth Holdings with a short position of Lands End. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duluth Holdings and Lands End.
Diversification Opportunities for Duluth Holdings and Lands End
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Duluth and Lands is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Duluth Holdings and Lands End in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lands End and Duluth Holdings 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 Duluth Holdings are associated (or correlated) with Lands End. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lands End has no effect on the direction of Duluth Holdings i.e., Duluth Holdings and Lands End go up and down completely randomly.
Pair Corralation between Duluth Holdings and Lands End
Given the investment horizon of 90 days Duluth Holdings is expected to under-perform the Lands End. But the stock apears to be less risky and, when comparing its historical volatility, Duluth Holdings is 1.24 times less risky than Lands End. The stock trades about -0.05 of its potential returns per unit of risk. The Lands End is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 921.00 in Lands End on October 20, 2024 and sell it today you would earn a total of 384.00 from holding Lands End or generate 41.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Duluth Holdings vs. Lands End
Performance |
| Timeline |
| Duluth Holdings |
| Lands End |
Duluth Holdings and Lands End Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duluth Holdings and Lands End
The main advantage of trading using opposite Duluth Holdings and Lands End positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duluth Holdings position performs unexpectedly, Lands End 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 Lands End will offset losses from the drop in Lands End's long position.| Duluth Holdings vs. Zumiez Inc | Duluth Holdings vs. JJill Inc | Duluth Holdings vs. Shoe Carnival | Duluth Holdings vs. Cato Corporation |
| Lands End vs. Tillys Inc | Lands End vs. Zumiez Inc | Lands End vs. Citi Trends | Lands End vs. Cato Corporation |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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