Correlation Between Northann Corp and Leggett Platt
Can any of the company-specific risk be diversified away by investing in both Northann Corp and Leggett Platt 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 Northann Corp and Leggett Platt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northann Corp and Leggett Platt Incorporated, you can compare the effects of market volatilities on Northann Corp and Leggett Platt 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 Northann Corp with a short position of Leggett Platt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northann Corp and Leggett Platt.
Diversification Opportunities for Northann Corp and Leggett Platt
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Northann and Leggett is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Northann Corp and Leggett Platt Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leggett Platt and Northann Corp 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 Northann Corp are associated (or correlated) with Leggett Platt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leggett Platt has no effect on the direction of Northann Corp i.e., Northann Corp and Leggett Platt go up and down completely randomly.
Pair Corralation between Northann Corp and Leggett Platt
Considering the 90-day investment horizon Northann Corp is expected to under-perform the Leggett Platt. In addition to that, Northann Corp is 2.34 times more volatile than Leggett Platt Incorporated. It trades about -0.15 of its total potential returns per unit of risk. Leggett Platt Incorporated is currently generating about 0.3 per unit of volatility. If you would invest 957.00 in Leggett Platt Incorporated on November 2, 2024 and sell it today you would earn a total of 137.00 from holding Leggett Platt Incorporated or generate 14.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northann Corp vs. Leggett Platt Incorporated
Performance |
| Timeline |
| Northann Corp |
| Leggett Platt |
Northann Corp and Leggett Platt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northann Corp and Leggett Platt
The main advantage of trading using opposite Northann Corp and Leggett Platt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northann Corp position performs unexpectedly, Leggett Platt 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 Leggett Platt will offset losses from the drop in Leggett Platt's long position.| Northann Corp vs. The Gap, | Northann Corp vs. Ralph Lauren Corp | Northann Corp vs. BJs Restaurants | Northann Corp vs. Levi Strauss Co |
| Leggett Platt vs. Mohawk Industries | Leggett Platt vs. Tempur Sealy International | Leggett Platt vs. Ethan Allen Interiors | Leggett Platt vs. The Lovesac |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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