Correlation Between Haier Smart and La Z
Can any of the company-specific risk be diversified away by investing in both Haier Smart and La Z 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 Haier Smart and La Z into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haier Smart Home and La Z Boy Incorporated, you can compare the effects of market volatilities on Haier Smart and La Z 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 Haier Smart with a short position of La Z. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haier Smart and La Z.
Diversification Opportunities for Haier Smart and La Z
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Haier and LZB is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Haier Smart Home and La Z Boy Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on La Z Boy and Haier Smart 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 Haier Smart Home are associated (or correlated) with La Z. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of La Z Boy has no effect on the direction of Haier Smart i.e., Haier Smart and La Z go up and down completely randomly.
Pair Corralation between Haier Smart and La Z
Assuming the 90 days horizon Haier Smart Home is expected to under-perform the La Z. In addition to that, Haier Smart is 1.03 times more volatile than La Z Boy Incorporated. It trades about -0.28 of its total potential returns per unit of risk. La Z Boy Incorporated is currently generating about 0.38 per unit of volatility. If you would invest 3,981 in La Z Boy Incorporated on August 27, 2024 and sell it today you would earn a total of 596.00 from holding La Z Boy Incorporated or generate 14.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haier Smart Home vs. La Z Boy Incorporated
Performance |
| Timeline |
| Haier Smart Home |
| La Z Boy |
Haier Smart and La Z Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haier Smart and La Z
The main advantage of trading using opposite Haier Smart and La Z positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haier Smart position performs unexpectedly, La Z 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 La Z will offset losses from the drop in La Z's long position.| Haier Smart vs. La Z Boy Incorporated | Haier Smart vs. MasterBrand | Haier Smart vs. MillerKnoll | Haier Smart vs. Flexsteel Industries |
| La Z vs. Flexsteel Industries | La Z vs. Crown Crafts | La Z vs. Bassett Furniture Industries | La Z vs. Hamilton Beach Brands |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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