Correlation Between Lowes Companies and MAHLE Metal
Can any of the company-specific risk be diversified away by investing in both Lowes Companies and MAHLE Metal 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 MAHLE Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lowes Companies and MAHLE Metal Leve, you can compare the effects of market volatilities on Lowes Companies and MAHLE Metal 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 MAHLE Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lowes Companies and MAHLE Metal.
Diversification Opportunities for Lowes Companies and MAHLE Metal
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lowes and MAHLE is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Lowes Companies and MAHLE Metal Leve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAHLE Metal Leve 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 MAHLE Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAHLE Metal Leve has no effect on the direction of Lowes Companies i.e., Lowes Companies and MAHLE Metal go up and down completely randomly.
Pair Corralation between Lowes Companies and MAHLE Metal
Assuming the 90 days trading horizon Lowes Companies is expected to generate 0.95 times more return on investment than MAHLE Metal. However, Lowes Companies is 1.05 times less risky than MAHLE Metal. It trades about 0.24 of its potential returns per unit of risk. MAHLE Metal Leve is currently generating about -0.33 per unit of risk. If you would invest 7,648 in Lowes Companies on September 5, 2024 and sell it today you would earn a total of 624.00 from holding Lowes Companies or generate 8.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Lowes Companies vs. MAHLE Metal Leve
Performance |
| Timeline |
| Lowes Companies |
| MAHLE Metal Leve |
Lowes Companies and MAHLE Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lowes Companies and MAHLE Metal
The main advantage of trading using opposite Lowes Companies and MAHLE Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lowes Companies position performs unexpectedly, MAHLE Metal 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 MAHLE Metal will offset losses from the drop in MAHLE Metal's long position.| Lowes Companies vs. MAHLE Metal Leve | Lowes Companies vs. Mitsubishi UFJ Financial | Lowes Companies vs. SVB Financial Group | Lowes Companies vs. Taiwan Semiconductor Manufacturing |
| MAHLE Metal vs. Tupy SA | MAHLE Metal vs. Engie Brasil Energia | MAHLE Metal vs. Grendene SA | MAHLE Metal vs. M Dias Branco |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |