Correlation Between Lowes Companies and Newegg Commerce
Can any of the company-specific risk be diversified away by investing in both Lowes Companies and Newegg Commerce 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 Newegg Commerce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lowes Companies and Newegg Commerce, you can compare the effects of market volatilities on Lowes Companies and Newegg Commerce 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 Newegg Commerce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lowes Companies and Newegg Commerce.
Diversification Opportunities for Lowes Companies and Newegg Commerce
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lowes and Newegg is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Lowes Companies and Newegg Commerce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newegg Commerce 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 Newegg Commerce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newegg Commerce has no effect on the direction of Lowes Companies i.e., Lowes Companies and Newegg Commerce go up and down completely randomly.
Pair Corralation between Lowes Companies and Newegg Commerce
Considering the 90-day investment horizon Lowes Companies is expected to generate 0.46 times more return on investment than Newegg Commerce. However, Lowes Companies is 2.16 times less risky than Newegg Commerce. It trades about 0.11 of its potential returns per unit of risk. Newegg Commerce is currently generating about -0.04 per unit of risk. If you would invest 26,297 in Lowes Companies on August 30, 2024 and sell it today you would earn a total of 1,022 from holding Lowes Companies or generate 3.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lowes Companies vs. Newegg Commerce
Performance |
| Timeline |
| Lowes Companies |
| Newegg Commerce |
Lowes Companies and Newegg Commerce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lowes Companies and Newegg Commerce
The main advantage of trading using opposite Lowes Companies and Newegg Commerce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lowes Companies position performs unexpectedly, Newegg Commerce 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 Newegg Commerce will offset losses from the drop in Newegg Commerce'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 |
| Newegg Commerce vs. Jeffs Brands | Newegg Commerce vs. Jumia Technologies AG | Newegg Commerce vs. Kidpik Corp | Newegg Commerce vs. Qurate Retail Series |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |