Correlation Between Lakeland Industries and United Parks
Can any of the company-specific risk be diversified away by investing in both Lakeland Industries and United Parks 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 United Parks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lakeland Industries and United Parks Resorts, you can compare the effects of market volatilities on Lakeland Industries and United Parks 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 United Parks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lakeland Industries and United Parks.
Diversification Opportunities for Lakeland Industries and United Parks
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lakeland and United is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Lakeland Industries and United Parks Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Parks Resorts 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 United Parks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Parks Resorts has no effect on the direction of Lakeland Industries i.e., Lakeland Industries and United Parks go up and down completely randomly.
Pair Corralation between Lakeland Industries and United Parks
Given the investment horizon of 90 days Lakeland Industries is expected to generate 1.17 times more return on investment than United Parks. However, Lakeland Industries is 1.17 times more volatile than United Parks Resorts. It trades about 0.05 of its potential returns per unit of risk. United Parks Resorts is currently generating about 0.01 per unit of risk. If you would invest 1,341 in Lakeland Industries on August 24, 2024 and sell it today you would earn a total of 820.00 from holding Lakeland Industries or generate 61.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lakeland Industries vs. United Parks Resorts
Performance |
| Timeline |
| Lakeland Industries |
| United Parks Resorts |
Lakeland Industries and United Parks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lakeland Industries and United Parks
The main advantage of trading using opposite Lakeland Industries and United Parks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lakeland Industries position performs unexpectedly, United Parks 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 United Parks will offset losses from the drop in United Parks' long position.| Lakeland Industries vs. Vince Holding Corp | Lakeland Industries vs. Oxford Industries | Lakeland Industries vs. Gildan Activewear | Lakeland Industries vs. Columbia Sportswear |
| United Parks vs. Vera Bradley | United Parks vs. Under Armour C | United Parks vs. Lakeland Industries | United Parks vs. Air Lease |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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