Correlation Between Leslies and Container Store
Can any of the company-specific risk be diversified away by investing in both Leslies and Container Store 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 Container Store into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leslies and Container Store Group, you can compare the effects of market volatilities on Leslies and Container Store 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 Container Store. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leslies and Container Store.
Diversification Opportunities for Leslies and Container Store
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Leslies and Container is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Leslies and Container Store Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Container Store Group 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 Container Store. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Container Store Group has no effect on the direction of Leslies i.e., Leslies and Container Store go up and down completely randomly.
Pair Corralation between Leslies and Container Store
Given the investment horizon of 90 days Leslies is expected to generate 0.59 times more return on investment than Container Store. However, Leslies is 1.7 times less risky than Container Store. It trades about -0.04 of its potential returns per unit of risk. Container Store Group is currently generating about -0.04 per unit of risk. If you would invest 1,375 in Leslies on August 27, 2024 and sell it today you would lose (1,056) from holding Leslies or give up 76.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leslies vs. Container Store Group
Performance |
| Timeline |
| Leslies |
| Container Store Group |
Leslies and Container Store Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leslies and Container Store
The main advantage of trading using opposite Leslies and Container Store positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leslies position performs unexpectedly, Container Store 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 Container Store will offset losses from the drop in Container Store's long position.| Leslies vs. Sally Beauty Holdings | Leslies vs. ODP Corp | Leslies vs. 1 800 FLOWERSCOM | Leslies vs. Caseys General Stores |
| Container Store vs. Tillys Inc | Container Store vs. Big 5 Sporting | Container Store vs. Sportsmans | Container Store vs. Noodles Company |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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