Correlation Between Lifetime Brands and Traeger
Can any of the company-specific risk be diversified away by investing in both Lifetime Brands and Traeger 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 Lifetime Brands and Traeger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifetime Brands and Traeger, you can compare the effects of market volatilities on Lifetime Brands and Traeger 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 Lifetime Brands with a short position of Traeger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifetime Brands and Traeger.
Diversification Opportunities for Lifetime Brands and Traeger
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lifetime and Traeger is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Lifetime Brands and Traeger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Traeger and Lifetime Brands 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 Lifetime Brands are associated (or correlated) with Traeger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Traeger has no effect on the direction of Lifetime Brands i.e., Lifetime Brands and Traeger go up and down completely randomly.
Pair Corralation between Lifetime Brands and Traeger
Given the investment horizon of 90 days Lifetime Brands is expected to generate 1.24 times more return on investment than Traeger. However, Lifetime Brands is 1.24 times more volatile than Traeger. It trades about 0.13 of its potential returns per unit of risk. Traeger is currently generating about 0.01 per unit of risk. If you would invest 567.00 in Lifetime Brands on October 20, 2024 and sell it today you would earn a total of 45.00 from holding Lifetime Brands or generate 7.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifetime Brands vs. Traeger
Performance |
| Timeline |
| Lifetime Brands |
| Traeger |
Lifetime Brands and Traeger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifetime Brands and Traeger
The main advantage of trading using opposite Lifetime Brands and Traeger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifetime Brands position performs unexpectedly, Traeger 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 Traeger will offset losses from the drop in Traeger's long position.| Lifetime Brands vs. Bassett Furniture Industries | Lifetime Brands vs. Flexsteel Industries | Lifetime Brands vs. Hamilton Beach Brands | Lifetime Brands vs. Natuzzi SpA |
| Traeger vs. Sleep Number Corp | Traeger vs. Tempur Sealy International | Traeger vs. The Lovesac | Traeger vs. MillerKnoll |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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