Correlation Between Northann Corp and La Z
Can any of the company-specific risk be diversified away by investing in both Northann Corp and La Z 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 La Z into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northann Corp and La Z Boy Incorporated, you can compare the effects of market volatilities on Northann Corp and La Z 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 La Z. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northann Corp and La Z.
Diversification Opportunities for Northann Corp and La Z
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Northann and LZB is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Northann Corp and La Z Boy Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on La Z Boy 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 La Z. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of La Z Boy has no effect on the direction of Northann Corp i.e., Northann Corp and La Z go up and down completely randomly.
Pair Corralation between Northann Corp and La Z
Considering the 90-day investment horizon Northann Corp is expected to generate 10.03 times more return on investment than La Z. However, Northann Corp is 10.03 times more volatile than La Z Boy Incorporated. It trades about 0.15 of its potential returns per unit of risk. La Z Boy Incorporated is currently generating about 0.53 per unit of risk. If you would invest 19.00 in Northann Corp on September 1, 2024 and sell it today you would earn a total of 6.00 from holding Northann Corp or generate 31.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northann Corp vs. La Z Boy Incorporated
Performance |
| Timeline |
| Northann Corp |
| La Z Boy |
Northann Corp and La Z Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northann Corp and La Z
The main advantage of trading using opposite Northann Corp and La Z positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northann Corp position performs unexpectedly, La Z 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 La Z will offset losses from the drop in La Z's long position.| Northann Corp vs. La Z Boy Incorporated | Northann Corp vs. Natuzzi SpA | Northann Corp vs. Mohawk Industries | Northann Corp vs. MasterBrand |
| La Z vs. Bassett Furniture Industries | La Z vs. Willis Lease Finance | La Z vs. Rocky Brands | La Z vs. First Business Financial |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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