Correlation Between Lowes Companies and Lonza
Can any of the company-specific risk be diversified away by investing in both Lowes Companies and Lonza 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 Lonza into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lowes Companies and Lonza Group, you can compare the effects of market volatilities on Lowes Companies and Lonza 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 Lonza. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lowes Companies and Lonza.
Diversification Opportunities for Lowes Companies and Lonza
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lowes and Lonza is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Lowes Companies and Lonza Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lonza Group 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 Lonza. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lonza Group has no effect on the direction of Lowes Companies i.e., Lowes Companies and Lonza go up and down completely randomly.
Pair Corralation between Lowes Companies and Lonza
Considering the 90-day investment horizon Lowes Companies is expected to generate 0.61 times more return on investment than Lonza. However, Lowes Companies is 1.65 times less risky than Lonza. It trades about 0.11 of its potential returns per unit of risk. Lonza Group is currently generating about 0.02 per unit of risk. If you would invest 26,183 in Lowes Companies on September 1, 2024 and sell it today you would earn a total of 1,060 from holding Lowes Companies or generate 4.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lowes Companies vs. Lonza Group
Performance |
| Timeline |
| Lowes Companies |
| Lonza Group |
Lowes Companies and Lonza Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lowes Companies and Lonza
The main advantage of trading using opposite Lowes Companies and Lonza positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lowes Companies position performs unexpectedly, Lonza 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 Lonza will offset losses from the drop in Lonza'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 |
| Lonza vs. China New Energy | Lonza vs. Sonic Healthcare Ltd | Lonza vs. Charles River Laboratories | Lonza vs. Qiagen NV |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |