Correlation Between Lakeland Industries and Vita Coco
Can any of the company-specific risk be diversified away by investing in both Lakeland Industries and Vita Coco 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 Lakeland Industries and Vita Coco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lakeland Industries and Vita Coco, you can compare the effects of market volatilities on Lakeland Industries and Vita Coco 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 Lakeland Industries with a short position of Vita Coco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lakeland Industries and Vita Coco.
Diversification Opportunities for Lakeland Industries and Vita Coco
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lakeland and Vita is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Lakeland Industries and Vita Coco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vita Coco and Lakeland Industries 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 Lakeland Industries are associated (or correlated) with Vita Coco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vita Coco has no effect on the direction of Lakeland Industries i.e., Lakeland Industries and Vita Coco go up and down completely randomly.
Pair Corralation between Lakeland Industries and Vita Coco
Given the investment horizon of 90 days Lakeland Industries is expected to generate 2.41 times less return on investment than Vita Coco. In addition to that, Lakeland Industries is 1.18 times more volatile than Vita Coco. It trades about 0.05 of its total potential returns per unit of risk. Vita Coco is currently generating about 0.13 per unit of volatility. If you would invest 1,969 in Vita Coco on August 28, 2024 and sell it today you would earn a total of 1,665 from holding Vita Coco or generate 84.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.52% |
| Values | Daily Returns |
Lakeland Industries vs. Vita Coco
Performance |
| Timeline |
| Lakeland Industries |
| Vita Coco |
Lakeland Industries and Vita Coco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lakeland Industries and Vita Coco
The main advantage of trading using opposite Lakeland Industries and Vita Coco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lakeland Industries position performs unexpectedly, Vita Coco 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 Vita Coco will offset losses from the drop in Vita Coco's long position.| Lakeland Industries vs. Vince Holding Corp | Lakeland Industries vs. Oxford Industries | Lakeland Industries vs. Gildan Activewear | Lakeland Industries vs. Columbia Sportswear |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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