Correlation Between Lowes Companies and Naas Technology
Can any of the company-specific risk be diversified away by investing in both Lowes Companies and Naas Technology 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 Naas Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lowes Companies and Naas Technology ADR, you can compare the effects of market volatilities on Lowes Companies and Naas Technology 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 Naas Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lowes Companies and Naas Technology.
Diversification Opportunities for Lowes Companies and Naas Technology
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lowes and Naas is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Lowes Companies and Naas Technology ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naas Technology ADR 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 Naas Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naas Technology ADR has no effect on the direction of Lowes Companies i.e., Lowes Companies and Naas Technology go up and down completely randomly.
Pair Corralation between Lowes Companies and Naas Technology
Considering the 90-day investment horizon Lowes Companies is expected to generate 0.15 times more return on investment than Naas Technology. However, Lowes Companies is 6.88 times less risky than Naas Technology. It trades about 0.06 of its potential returns per unit of risk. Naas Technology ADR is currently generating about -0.06 per unit of risk. If you would invest 20,717 in Lowes Companies on September 4, 2024 and sell it today you would earn a total of 6,488 from holding Lowes Companies or generate 31.32% 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. Naas Technology ADR
Performance |
| Timeline |
| Lowes Companies |
| Naas Technology ADR |
Lowes Companies and Naas Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lowes Companies and Naas Technology
The main advantage of trading using opposite Lowes Companies and Naas Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lowes Companies position performs unexpectedly, Naas Technology 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 Naas Technology will offset losses from the drop in Naas Technology's long position.| Lowes Companies vs. Floor Decor Holdings | Lowes Companies vs. Arhaus Inc | Lowes Companies vs. Haverty Furniture Companies | Lowes Companies vs. Kirklands |
| Naas Technology vs. Leslies | Naas Technology vs. Sally Beauty Holdings | Naas Technology vs. ODP Corp | Naas Technology vs. 1 800 FLOWERSCOM |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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