Correlation Between Lifetime Brands and Ethan Allen
Can any of the company-specific risk be diversified away by investing in both Lifetime Brands and Ethan Allen 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 Ethan Allen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifetime Brands and Ethan Allen Interiors, you can compare the effects of market volatilities on Lifetime Brands and Ethan Allen 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 Ethan Allen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifetime Brands and Ethan Allen.
Diversification Opportunities for Lifetime Brands and Ethan Allen
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lifetime and Ethan is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Lifetime Brands and Ethan Allen Interiors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ethan Allen Interiors 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 Ethan Allen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ethan Allen Interiors has no effect on the direction of Lifetime Brands i.e., Lifetime Brands and Ethan Allen go up and down completely randomly.
Pair Corralation between Lifetime Brands and Ethan Allen
Given the investment horizon of 90 days Lifetime Brands is expected to generate 1.77 times more return on investment than Ethan Allen. However, Lifetime Brands is 1.77 times more volatile than Ethan Allen Interiors. It trades about 0.03 of its potential returns per unit of risk. Ethan Allen Interiors is currently generating about 0.04 per unit of risk. If you would invest 484.00 in Lifetime Brands on August 31, 2024 and sell it today you would earn a total of 105.00 from holding Lifetime Brands or generate 21.69% 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. Ethan Allen Interiors
Performance |
| Timeline |
| Lifetime Brands |
| Ethan Allen Interiors |
Lifetime Brands and Ethan Allen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifetime Brands and Ethan Allen
The main advantage of trading using opposite Lifetime Brands and Ethan Allen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifetime Brands position performs unexpectedly, Ethan Allen 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 Ethan Allen will offset losses from the drop in Ethan Allen's long position.| Lifetime Brands vs. Fundamental Global | Lifetime Brands vs. Yoshitsu Co Ltd | Lifetime Brands vs. Hour Loop | Lifetime Brands vs. Direct Digital Holdings |
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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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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