Correlation Between Leslies and Lazydays Holdings
Can any of the company-specific risk be diversified away by investing in both Leslies and Lazydays 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 Leslies and Lazydays Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leslies and Lazydays Holdings, you can compare the effects of market volatilities on Leslies and Lazydays 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 Leslies with a short position of Lazydays Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leslies and Lazydays Holdings.
Diversification Opportunities for Leslies and Lazydays Holdings
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Leslies and Lazydays is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Leslies and Lazydays Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazydays Holdings 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 Lazydays Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazydays Holdings has no effect on the direction of Leslies i.e., Leslies and Lazydays Holdings go up and down completely randomly.
Pair Corralation between Leslies and Lazydays Holdings
Given the investment horizon of 90 days Leslies is expected to generate 0.48 times more return on investment than Lazydays Holdings. However, Leslies is 2.09 times less risky than Lazydays Holdings. It trades about -0.03 of its potential returns per unit of risk. Lazydays Holdings is currently generating about -0.08 per unit of risk. If you would invest 218.00 in Leslies on October 25, 2024 and sell it today you would lose (4.00) from holding Leslies or give up 1.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leslies vs. Lazydays Holdings
Performance |
| Timeline |
| Leslies |
| Lazydays Holdings |
Leslies and Lazydays Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leslies and Lazydays Holdings
The main advantage of trading using opposite Leslies and Lazydays Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leslies position performs unexpectedly, Lazydays 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 Lazydays Holdings will offset losses from the drop in Lazydays Holdings' long position.| Leslies vs. Sally Beauty Holdings | Leslies vs. ODP Corp | Leslies vs. 1 800 FLOWERSCOM | Leslies vs. Caseys General Stores |
| Lazydays Holdings vs. Cars Inc | Lazydays Holdings vs. Marine Products | Lazydays Holdings vs. SmartStop Self Storage | Lazydays Holdings vs. Asure Software |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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