Correlation Between Lindsay and Arts Way
Can any of the company-specific risk be diversified away by investing in both Lindsay and Arts Way 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 Lindsay and Arts Way into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lindsay and Arts Way Manufacturing Co, you can compare the effects of market volatilities on Lindsay and Arts Way 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 Lindsay with a short position of Arts Way. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindsay and Arts Way.
Diversification Opportunities for Lindsay and Arts Way
Good diversification
The 3 months correlation between Lindsay and Arts is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Lindsay and Arts Way Manufacturing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arts Way Manufacturing and Lindsay 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 Lindsay are associated (or correlated) with Arts Way. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arts Way Manufacturing has no effect on the direction of Lindsay i.e., Lindsay and Arts Way go up and down completely randomly.
Pair Corralation between Lindsay and Arts Way
Considering the 90-day investment horizon Lindsay is expected to generate 53.54 times less return on investment than Arts Way. But when comparing it to its historical volatility, Lindsay is 23.08 times less risky than Arts Way. It trades about 0.02 of its potential returns per unit of risk. Arts Way Manufacturing Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 258.00 in Arts Way Manufacturing Co on August 31, 2024 and sell it today you would lose (88.00) from holding Arts Way Manufacturing Co or give up 34.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lindsay vs. Arts Way Manufacturing Co
Performance |
| Timeline |
| Lindsay |
| Arts Way Manufacturing |
Lindsay and Arts Way Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lindsay and Arts Way
The main advantage of trading using opposite Lindsay and Arts Way positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindsay position performs unexpectedly, Arts Way 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 Arts Way will offset losses from the drop in Arts Way's long position.| Lindsay vs. Columbus McKinnon | Lindsay vs. Astec Industries | Lindsay vs. Shyft Group | Lindsay vs. AGCO 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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