Correlation Between Lowes Companies and Original Bark
Can any of the company-specific risk be diversified away by investing in both Lowes Companies and Original Bark 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 Lowes Companies and Original Bark into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lowes Companies and Original Bark Co, you can compare the effects of market volatilities on Lowes Companies and Original Bark 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 Lowes Companies with a short position of Original Bark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lowes Companies and Original Bark.
Diversification Opportunities for Lowes Companies and Original Bark
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lowes and Original is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Lowes Companies and Original Bark Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Original Bark and Lowes Companies 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 Lowes Companies are associated (or correlated) with Original Bark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Original Bark has no effect on the direction of Lowes Companies i.e., Lowes Companies and Original Bark go up and down completely randomly.
Pair Corralation between Lowes Companies and Original Bark
Considering the 90-day investment horizon Lowes Companies is expected to generate 4.08 times less return on investment than Original Bark. But when comparing it to its historical volatility, Lowes Companies is 3.18 times less risky than Original Bark. It trades about 0.09 of its potential returns per unit of risk. Original Bark Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 77.00 in Original Bark Co on September 2, 2024 and sell it today you would earn a total of 139.00 from holding Original Bark Co or generate 180.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lowes Companies vs. Original Bark Co
Performance |
| Timeline |
| Lowes Companies |
| Original Bark |
Lowes Companies and Original Bark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lowes Companies and Original Bark
The main advantage of trading using opposite Lowes Companies and Original Bark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lowes Companies position performs unexpectedly, Original Bark 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 Original Bark will offset losses from the drop in Original Bark's long position.| Lowes Companies vs. Floor Decor Holdings | Lowes Companies vs. Arhaus Inc | Lowes Companies vs. Haverty Furniture Companies | Lowes Companies vs. Home Depot |
| Original Bark vs. Alcon AG | Original Bark vs. The Cooper Companies, | Original Bark vs. AngioDynamics | Original Bark vs. AptarGroup |
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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