Correlation Between Natuzzi SpA and Lifetime Brands
Can any of the company-specific risk be diversified away by investing in both Natuzzi SpA and Lifetime Brands 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 Natuzzi SpA and Lifetime Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natuzzi SpA and Lifetime Brands, you can compare the effects of market volatilities on Natuzzi SpA and Lifetime Brands 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 Natuzzi SpA with a short position of Lifetime Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natuzzi SpA and Lifetime Brands.
Diversification Opportunities for Natuzzi SpA and Lifetime Brands
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Natuzzi and Lifetime is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Natuzzi SpA and Lifetime Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifetime Brands and Natuzzi SpA 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 Natuzzi SpA are associated (or correlated) with Lifetime Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifetime Brands has no effect on the direction of Natuzzi SpA i.e., Natuzzi SpA and Lifetime Brands go up and down completely randomly.
Pair Corralation between Natuzzi SpA and Lifetime Brands
Considering the 90-day investment horizon Natuzzi SpA is expected to under-perform the Lifetime Brands. But the stock apears to be less risky and, when comparing its historical volatility, Natuzzi SpA is 1.76 times less risky than Lifetime Brands. The stock trades about -0.08 of its potential returns per unit of risk. The Lifetime Brands is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 505.00 in Lifetime Brands on December 24, 2024 and sell it today you would earn a total of 37.00 from holding Lifetime Brands or generate 7.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Natuzzi SpA vs. Lifetime Brands
Performance |
| Timeline |
| Natuzzi SpA |
| Lifetime Brands |
Natuzzi SpA and Lifetime Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natuzzi SpA and Lifetime Brands
The main advantage of trading using opposite Natuzzi SpA and Lifetime Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natuzzi SpA position performs unexpectedly, Lifetime Brands 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 Lifetime Brands will offset losses from the drop in Lifetime Brands' long position.| Natuzzi SpA vs. Bassett Furniture Industries | Natuzzi SpA vs. Hooker Furniture | Natuzzi SpA vs. Flexsteel Industries | Natuzzi SpA vs. Ethan Allen Interiors |
| Lifetime Brands vs. Bassett Furniture Industries | Lifetime Brands vs. Flexsteel Industries | Lifetime Brands vs. Hamilton Beach Brands | Lifetime Brands vs. Natuzzi SpA |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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