Correlation Between Lands End and Duluth Holdings
Can any of the company-specific risk be diversified away by investing in both Lands End and Duluth Holdings 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 Lands End and Duluth Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lands End and Duluth Holdings, you can compare the effects of market volatilities on Lands End and Duluth Holdings 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 Lands End with a short position of Duluth Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lands End and Duluth Holdings.
Diversification Opportunities for Lands End and Duluth Holdings
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lands and Duluth is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Lands End and Duluth Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duluth Holdings and Lands End 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 Lands End are associated (or correlated) with Duluth Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duluth Holdings has no effect on the direction of Lands End i.e., Lands End and Duluth Holdings go up and down completely randomly.
Pair Corralation between Lands End and Duluth Holdings
Allowing for the 90-day total investment horizon Lands End is expected to generate 0.7 times more return on investment than Duluth Holdings. However, Lands End is 1.43 times less risky than Duluth Holdings. It trades about -0.1 of its potential returns per unit of risk. Duluth Holdings is currently generating about -0.1 per unit of risk. If you would invest 1,628 in Lands End on August 24, 2024 and sell it today you would lose (88.00) from holding Lands End or give up 5.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lands End vs. Duluth Holdings
Performance |
| Timeline |
| Lands End |
| Duluth Holdings |
Lands End and Duluth Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lands End and Duluth Holdings
The main advantage of trading using opposite Lands End and Duluth Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lands End position performs unexpectedly, Duluth Holdings 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 Duluth Holdings will offset losses from the drop in Duluth Holdings' long position.| Lands End vs. Tillys Inc | Lands End vs. Zumiez Inc | Lands End vs. Citi Trends | Lands End vs. Cato Corporation |
| Duluth Holdings vs. Zumiez Inc | Duluth Holdings vs. JJill Inc | Duluth Holdings vs. Shoe Carnival | Duluth Holdings vs. Cato Corporation |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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