Correlation Between Lovesac and Aterian
Can any of the company-specific risk be diversified away by investing in both Lovesac and Aterian 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 Lovesac and Aterian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Lovesac and Aterian, you can compare the effects of market volatilities on Lovesac and Aterian 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 Lovesac with a short position of Aterian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lovesac and Aterian.
Diversification Opportunities for Lovesac and Aterian
Excellent diversification
The 3 months correlation between Lovesac and Aterian is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding The Lovesac and Aterian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aterian and Lovesac 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 The Lovesac are associated (or correlated) with Aterian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aterian has no effect on the direction of Lovesac i.e., Lovesac and Aterian go up and down completely randomly.
Pair Corralation between Lovesac and Aterian
Given the investment horizon of 90 days The Lovesac is expected to generate 0.62 times more return on investment than Aterian. However, The Lovesac is 1.61 times less risky than Aterian. It trades about 0.05 of its potential returns per unit of risk. Aterian is currently generating about -0.02 per unit of risk. If you would invest 1,971 in The Lovesac on September 3, 2024 and sell it today you would earn a total of 1,801 from holding The Lovesac or generate 91.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Lovesac vs. Aterian
Performance |
| Timeline |
| Lovesac |
| Aterian |
Lovesac and Aterian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lovesac and Aterian
The main advantage of trading using opposite Lovesac and Aterian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lovesac position performs unexpectedly, Aterian 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 Aterian will offset losses from the drop in Aterian's long position.| Lovesac vs. Tempur Sealy International | Lovesac vs. La Z Boy Incorporated | Lovesac vs. Purple Innovation | Lovesac vs. MasterBrand |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Stocks Directory Find actively traded stocks across global markets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |