Correlation Between LESLIES INC and HORNBACH Baumarkt
Can any of the company-specific risk be diversified away by investing in both LESLIES INC and HORNBACH Baumarkt 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 LESLIES INC and HORNBACH Baumarkt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LESLIES INC DL and HORNBACH Baumarkt AG, you can compare the effects of market volatilities on LESLIES INC and HORNBACH Baumarkt 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 LESLIES INC with a short position of HORNBACH Baumarkt. Check out your portfolio center. Please also check ongoing floating volatility patterns of LESLIES INC and HORNBACH Baumarkt.
Diversification Opportunities for LESLIES INC and HORNBACH Baumarkt
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between LESLIES and HORNBACH is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding LESLIES INC DL and HORNBACH Baumarkt AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HORNBACH Baumarkt and LESLIES INC 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 LESLIES INC DL are associated (or correlated) with HORNBACH Baumarkt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HORNBACH Baumarkt has no effect on the direction of LESLIES INC i.e., LESLIES INC and HORNBACH Baumarkt go up and down completely randomly.
Pair Corralation between LESLIES INC and HORNBACH Baumarkt
Assuming the 90 days horizon LESLIES INC DL is expected to under-perform the HORNBACH Baumarkt. In addition to that, LESLIES INC is 4.41 times more volatile than HORNBACH Baumarkt AG. It trades about -0.04 of its total potential returns per unit of risk. HORNBACH Baumarkt AG is currently generating about 0.03 per unit of volatility. If you would invest 5,167 in HORNBACH Baumarkt AG on September 13, 2024 and sell it today you would earn a total of 883.00 from holding HORNBACH Baumarkt AG or generate 17.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LESLIES INC DL vs. HORNBACH Baumarkt AG
Performance |
| Timeline |
| LESLIES INC DL |
| HORNBACH Baumarkt |
LESLIES INC and HORNBACH Baumarkt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LESLIES INC and HORNBACH Baumarkt
The main advantage of trading using opposite LESLIES INC and HORNBACH Baumarkt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LESLIES INC position performs unexpectedly, HORNBACH Baumarkt 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 HORNBACH Baumarkt will offset losses from the drop in HORNBACH Baumarkt's long position.| LESLIES INC vs. The Home Depot | LESLIES INC vs. The Home Depot | LESLIES INC vs. Floor Decor Holdings | LESLIES INC vs. HORNBACH Baumarkt AG |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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