Correlation Between Johnson Outdoors and Leatt Corp
Can any of the company-specific risk be diversified away by investing in both Johnson Outdoors and Leatt Corp 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 Johnson Outdoors and Leatt Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Johnson Outdoors and Leatt Corp, you can compare the effects of market volatilities on Johnson Outdoors and Leatt Corp 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 Johnson Outdoors with a short position of Leatt Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johnson Outdoors and Leatt Corp.
Diversification Opportunities for Johnson Outdoors and Leatt Corp
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Johnson and Leatt is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Outdoors and Leatt Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leatt Corp and Johnson Outdoors 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 Johnson Outdoors are associated (or correlated) with Leatt Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leatt Corp has no effect on the direction of Johnson Outdoors i.e., Johnson Outdoors and Leatt Corp go up and down completely randomly.
Pair Corralation between Johnson Outdoors and Leatt Corp
Given the investment horizon of 90 days Johnson Outdoors is expected to generate 0.43 times more return on investment than Leatt Corp. However, Johnson Outdoors is 2.34 times less risky than Leatt Corp. It trades about 0.13 of its potential returns per unit of risk. Leatt Corp is currently generating about -0.03 per unit of risk. If you would invest 3,259 in Johnson Outdoors on August 28, 2024 and sell it today you would earn a total of 168.00 from holding Johnson Outdoors or generate 5.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Johnson Outdoors vs. Leatt Corp
Performance |
| Timeline |
| Johnson Outdoors |
| Leatt Corp |
Johnson Outdoors and Leatt Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Johnson Outdoors and Leatt Corp
The main advantage of trading using opposite Johnson Outdoors and Leatt Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johnson Outdoors position performs unexpectedly, Leatt Corp 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 Leatt Corp will offset losses from the drop in Leatt Corp's long position.| Johnson Outdoors vs. Vista Outdoor | Johnson Outdoors vs. Clarus Corp | Johnson Outdoors vs. Escalade Incorporated | Johnson Outdoors vs. JAKKS Pacific |
| Leatt Corp vs. Escalade Incorporated | Leatt Corp vs. American Outdoor Brands | Leatt Corp vs. OneSpaWorld Holdings | Leatt Corp vs. JAKKS Pacific |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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