Correlation Between Leslies and Arko Corp
Can any of the company-specific risk be diversified away by investing in both Leslies and Arko Corp 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 and Arko Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leslies and Arko Corp, you can compare the effects of market volatilities on Leslies and Arko Corp 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 with a short position of Arko Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leslies and Arko Corp.
Diversification Opportunities for Leslies and Arko Corp
Good diversification
The 3 months correlation between Leslies and Arko is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Leslies and Arko Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arko Corp and Leslies 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 are associated (or correlated) with Arko Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arko Corp has no effect on the direction of Leslies i.e., Leslies and Arko Corp go up and down completely randomly.
Pair Corralation between Leslies and Arko Corp
Given the investment horizon of 90 days Leslies is expected to generate 2.11 times more return on investment than Arko Corp. However, Leslies is 2.11 times more volatile than Arko Corp. It trades about 0.21 of its potential returns per unit of risk. Arko Corp is currently generating about 0.07 per unit of risk. If you would invest 288.00 in Leslies on August 28, 2024 and sell it today you would earn a total of 63.00 from holding Leslies or generate 21.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leslies vs. Arko Corp
Performance |
| Timeline |
| Leslies |
| Arko Corp |
Leslies and Arko Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leslies and Arko Corp
The main advantage of trading using opposite Leslies and Arko Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leslies position performs unexpectedly, Arko Corp 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 Arko Corp will offset losses from the drop in Arko Corp's long position.| Leslies vs. Sally Beauty Holdings | Leslies vs. ODP Corp | Leslies vs. 1 800 FLOWERSCOM | Leslies vs. Caseys General Stores |
| Arko Corp vs. Murphy USA | Arko Corp vs. National Vision Holdings | Arko Corp vs. ODP Corp | Arko Corp vs. Genuine Parts Co |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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