Correlation Between Floor Decor and LL Flooring
Can any of the company-specific risk be diversified away by investing in both Floor Decor and LL Flooring 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 Floor Decor and LL Flooring into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Floor Decor Holdings and LL Flooring Holdings, you can compare the effects of market volatilities on Floor Decor and LL Flooring 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 Floor Decor with a short position of LL Flooring. Check out your portfolio center. Please also check ongoing floating volatility patterns of Floor Decor and LL Flooring.
Diversification Opportunities for Floor Decor and LL Flooring
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Floor and LL Flooring is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Floor Decor Holdings and LL Flooring Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LL Flooring Holdings and Floor Decor 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 Floor Decor Holdings are associated (or correlated) with LL Flooring. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LL Flooring Holdings has no effect on the direction of Floor Decor i.e., Floor Decor and LL Flooring go up and down completely randomly.
Pair Corralation between Floor Decor and LL Flooring
If you would invest 10,184 in Floor Decor Holdings on August 28, 2024 and sell it today you would earn a total of 1,291 from holding Floor Decor Holdings or generate 12.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.0% |
| Values | Daily Returns |
Floor Decor Holdings vs. LL Flooring Holdings
Performance |
| Timeline |
| Floor Decor Holdings |
| LL Flooring Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Floor Decor and LL Flooring Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Floor Decor and LL Flooring
The main advantage of trading using opposite Floor Decor and LL Flooring positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Floor Decor position performs unexpectedly, LL Flooring 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 LL Flooring will offset losses from the drop in LL Flooring's long position.| Floor Decor vs. Arhaus Inc | Floor Decor vs. Haverty Furniture Companies | Floor Decor vs. Kirklands | Floor Decor vs. Haverty Furniture Companies |
| LL Flooring vs. Haverty Furniture Companies | LL Flooring vs. Arhaus Inc | LL Flooring vs. Tile Shop Holdings | LL Flooring vs. Floor Decor Holdings |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |