Correlation Between Lowes Companies and Fiskars Oyj
Can any of the company-specific risk be diversified away by investing in both Lowes Companies and Fiskars Oyj 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 Fiskars Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lowes Companies and Fiskars Oyj Abp, you can compare the effects of market volatilities on Lowes Companies and Fiskars Oyj 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 Fiskars Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lowes Companies and Fiskars Oyj.
Diversification Opportunities for Lowes Companies and Fiskars Oyj
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lowes and Fiskars is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Lowes Companies and Fiskars Oyj Abp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiskars Oyj Abp 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 Fiskars Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fiskars Oyj Abp has no effect on the direction of Lowes Companies i.e., Lowes Companies and Fiskars Oyj go up and down completely randomly.
Pair Corralation between Lowes Companies and Fiskars Oyj
Assuming the 90 days horizon Lowes Companies is expected to generate 0.99 times more return on investment than Fiskars Oyj. However, Lowes Companies is 1.01 times less risky than Fiskars Oyj. It trades about 0.05 of its potential returns per unit of risk. Fiskars Oyj Abp is currently generating about 0.01 per unit of risk. If you would invest 18,570 in Lowes Companies on September 3, 2024 and sell it today you would earn a total of 7,145 from holding Lowes Companies or generate 38.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lowes Companies vs. Fiskars Oyj Abp
Performance |
| Timeline |
| Lowes Companies |
| Fiskars Oyj Abp |
Lowes Companies and Fiskars Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lowes Companies and Fiskars Oyj
The main advantage of trading using opposite Lowes Companies and Fiskars Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lowes Companies position performs unexpectedly, Fiskars Oyj 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 Fiskars Oyj will offset losses from the drop in Fiskars Oyj's long position.| Lowes Companies vs. BURLINGTON STORES | Lowes Companies vs. Chongqing Machinery Electric | Lowes Companies vs. Retail Estates NV | Lowes Companies vs. MARKET VECTR RETAIL |
| Fiskars Oyj vs. Sunny Optical Technology | Fiskars Oyj vs. SMA Solar Technology | Fiskars Oyj vs. FANDIFI TECHNOLOGY P | Fiskars Oyj vs. National Health Investors |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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