Correlation Between Lovesac and Barry Callebaut
Can any of the company-specific risk be diversified away by investing in both Lovesac and Barry Callebaut 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 Barry Callebaut into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Lovesac and Barry Callebaut AG, you can compare the effects of market volatilities on Lovesac and Barry Callebaut 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 Barry Callebaut. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lovesac and Barry Callebaut.
Diversification Opportunities for Lovesac and Barry Callebaut
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lovesac and Barry is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding The Lovesac and Barry Callebaut AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barry Callebaut AG 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 Barry Callebaut. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barry Callebaut AG has no effect on the direction of Lovesac i.e., Lovesac and Barry Callebaut go up and down completely randomly.
Pair Corralation between Lovesac and Barry Callebaut
Given the investment horizon of 90 days The Lovesac is expected to generate 1.66 times more return on investment than Barry Callebaut. However, Lovesac is 1.66 times more volatile than Barry Callebaut AG. It trades about -0.06 of its potential returns per unit of risk. Barry Callebaut AG is currently generating about -0.24 per unit of risk. If you would invest 3,183 in The Lovesac on September 13, 2024 and sell it today you would lose (438.00) from holding The Lovesac or give up 13.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Lovesac vs. Barry Callebaut AG
Performance |
| Timeline |
| Lovesac |
| Barry Callebaut AG |
Lovesac and Barry Callebaut Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lovesac and Barry Callebaut
The main advantage of trading using opposite Lovesac and Barry Callebaut positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lovesac position performs unexpectedly, Barry Callebaut 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 Barry Callebaut will offset losses from the drop in Barry Callebaut's long position.| Lovesac vs. Tempur Sealy International | Lovesac vs. La Z Boy Incorporated | Lovesac vs. Purple Innovation | Lovesac vs. MasterBrand |
| Barry Callebaut vs. Hershey Co | Barry Callebaut vs. Mondelez International | Barry Callebaut vs. Chocoladefabriken Lindt Sprngli | Barry Callebaut vs. Bunzl plc |
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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