Correlation Between Lovesac and Kewaunee Scientific
Can any of the company-specific risk be diversified away by investing in both Lovesac and Kewaunee Scientific 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 Kewaunee Scientific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Lovesac and Kewaunee Scientific, you can compare the effects of market volatilities on Lovesac and Kewaunee Scientific 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 Kewaunee Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lovesac and Kewaunee Scientific.
Diversification Opportunities for Lovesac and Kewaunee Scientific
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lovesac and Kewaunee is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding The Lovesac and Kewaunee Scientific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kewaunee Scientific 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 Kewaunee Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kewaunee Scientific has no effect on the direction of Lovesac i.e., Lovesac and Kewaunee Scientific go up and down completely randomly.
Pair Corralation between Lovesac and Kewaunee Scientific
Given the investment horizon of 90 days Lovesac is expected to generate 1.27 times less return on investment than Kewaunee Scientific. But when comparing it to its historical volatility, The Lovesac is 1.37 times less risky than Kewaunee Scientific. It trades about 0.31 of its potential returns per unit of risk. Kewaunee Scientific is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 3,230 in Kewaunee Scientific on August 28, 2024 and sell it today you would earn a total of 1,024 from holding Kewaunee Scientific or generate 31.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Lovesac vs. Kewaunee Scientific
Performance |
| Timeline |
| Lovesac |
| Kewaunee Scientific |
Lovesac and Kewaunee Scientific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lovesac and Kewaunee Scientific
The main advantage of trading using opposite Lovesac and Kewaunee Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lovesac position performs unexpectedly, Kewaunee Scientific 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 Kewaunee Scientific will offset losses from the drop in Kewaunee Scientific's long position.| Lovesac vs. Tempur Sealy International | Lovesac vs. La Z Boy Incorporated | Lovesac vs. Purple Innovation | Lovesac vs. MasterBrand |
| Kewaunee Scientific vs. Hamilton Beach Brands | Kewaunee Scientific vs. Mohawk Industries | Kewaunee Scientific vs. Whirlpool | Kewaunee Scientific vs. iRobot |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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