Correlation Between Lowes Companies and WEBTOON Entertainment
Can any of the company-specific risk be diversified away by investing in both Lowes Companies and WEBTOON Entertainment 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 WEBTOON Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lowes Companies and WEBTOON Entertainment Common, you can compare the effects of market volatilities on Lowes Companies and WEBTOON Entertainment 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 WEBTOON Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lowes Companies and WEBTOON Entertainment.
Diversification Opportunities for Lowes Companies and WEBTOON Entertainment
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lowes and WEBTOON is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Lowes Companies and WEBTOON Entertainment Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WEBTOON Entertainment 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 WEBTOON Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WEBTOON Entertainment has no effect on the direction of Lowes Companies i.e., Lowes Companies and WEBTOON Entertainment go up and down completely randomly.
Pair Corralation between Lowes Companies and WEBTOON Entertainment
Considering the 90-day investment horizon Lowes Companies is expected to generate 0.43 times more return on investment than WEBTOON Entertainment. However, Lowes Companies is 2.3 times less risky than WEBTOON Entertainment. It trades about 0.46 of its potential returns per unit of risk. WEBTOON Entertainment Common is currently generating about -0.03 per unit of risk. If you would invest 24,737 in Lowes Companies on October 23, 2024 and sell it today you would earn a total of 1,817 from holding Lowes Companies or generate 7.35% 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. WEBTOON Entertainment Common
Performance |
| Timeline |
| Lowes Companies |
| WEBTOON Entertainment |
Lowes Companies and WEBTOON Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lowes Companies and WEBTOON Entertainment
The main advantage of trading using opposite Lowes Companies and WEBTOON Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lowes Companies position performs unexpectedly, WEBTOON Entertainment 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 WEBTOON Entertainment will offset losses from the drop in WEBTOON Entertainment'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 |
| WEBTOON Entertainment vs. LGI Homes | WEBTOON Entertainment vs. Spyre Therapeutics | WEBTOON Entertainment vs. Lowes Companies | WEBTOON Entertainment vs. Live Ventures |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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