Correlation Between HORNBACH Baumarkt and LESLIES INC
Can any of the company-specific risk be diversified away by investing in both HORNBACH Baumarkt and LESLIES INC 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 HORNBACH Baumarkt and LESLIES INC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HORNBACH Baumarkt AG and LESLIES INC DL, you can compare the effects of market volatilities on HORNBACH Baumarkt and LESLIES INC 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 HORNBACH Baumarkt with a short position of LESLIES INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of HORNBACH Baumarkt and LESLIES INC.
Diversification Opportunities for HORNBACH Baumarkt and LESLIES INC
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between HORNBACH and LESLIES is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding HORNBACH Baumarkt AG and LESLIES INC DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LESLIES INC DL and HORNBACH Baumarkt 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 HORNBACH Baumarkt AG are associated (or correlated) with LESLIES INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LESLIES INC DL has no effect on the direction of HORNBACH Baumarkt i.e., HORNBACH Baumarkt and LESLIES INC go up and down completely randomly.
Pair Corralation between HORNBACH Baumarkt and LESLIES INC
Assuming the 90 days trading horizon HORNBACH Baumarkt AG is expected to generate 0.23 times more return on investment than LESLIES INC. However, HORNBACH Baumarkt AG is 4.41 times less risky than LESLIES INC. It trades about 0.03 of its potential returns per unit of risk. LESLIES INC DL is currently generating about -0.04 per unit of risk. If you would invest 5,167 in HORNBACH Baumarkt AG on September 13, 2024 and sell it today you would earn a total of 883.00 from holding HORNBACH Baumarkt AG or generate 17.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HORNBACH Baumarkt AG vs. LESLIES INC DL
Performance |
| Timeline |
| HORNBACH Baumarkt |
| LESLIES INC DL |
HORNBACH Baumarkt and LESLIES INC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HORNBACH Baumarkt and LESLIES INC
The main advantage of trading using opposite HORNBACH Baumarkt and LESLIES INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HORNBACH Baumarkt position performs unexpectedly, LESLIES INC 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 INC will offset losses from the drop in LESLIES INC's long position.| HORNBACH Baumarkt vs. BURLINGTON STORES | HORNBACH Baumarkt vs. Retail Estates NV | HORNBACH Baumarkt vs. PICKN PAY STORES | HORNBACH Baumarkt vs. Sekisui Chemical Co |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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