Correlation Between Gap, and Lakeland Industries
Can any of the company-specific risk be diversified away by investing in both Gap, and Lakeland Industries 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 Gap, and Lakeland Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Gap, and Lakeland Industries, you can compare the effects of market volatilities on Gap, and Lakeland Industries 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 Gap, with a short position of Lakeland Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gap, and Lakeland Industries.
Diversification Opportunities for Gap, and Lakeland Industries
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gap, and Lakeland is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding The Gap, and Lakeland Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lakeland Industries and Gap, 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 The Gap, are associated (or correlated) with Lakeland Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lakeland Industries has no effect on the direction of Gap, i.e., Gap, and Lakeland Industries go up and down completely randomly.
Pair Corralation between Gap, and Lakeland Industries
Considering the 90-day investment horizon The Gap, is expected to generate 1.34 times more return on investment than Lakeland Industries. However, Gap, is 1.34 times more volatile than Lakeland Industries. It trades about 0.05 of its potential returns per unit of risk. Lakeland Industries is currently generating about 0.05 per unit of risk. If you would invest 1,389 in The Gap, on August 24, 2024 and sell it today you would earn a total of 1,098 from holding The Gap, or generate 79.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Gap, vs. Lakeland Industries
Performance |
| Timeline |
| Gap, |
| Lakeland Industries |
Gap, and Lakeland Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gap, and Lakeland Industries
The main advantage of trading using opposite Gap, and Lakeland Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gap, position performs unexpectedly, Lakeland Industries 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 Lakeland Industries will offset losses from the drop in Lakeland Industries' long position.The idea behind The Gap, and Lakeland Industries pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Lakeland Industries vs. Vince Holding Corp | Lakeland Industries vs. Oxford Industries | Lakeland Industries vs. Gildan Activewear | Lakeland Industries vs. Columbia Sportswear |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |