Correlation Between OReilly Automotive and Leslies
Can any of the company-specific risk be diversified away by investing in both OReilly Automotive and Leslies 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 OReilly Automotive and Leslies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OReilly Automotive and Leslies, you can compare the effects of market volatilities on OReilly Automotive and Leslies 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 OReilly Automotive with a short position of Leslies. Check out your portfolio center. Please also check ongoing floating volatility patterns of OReilly Automotive and Leslies.
Diversification Opportunities for OReilly Automotive and Leslies
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between OReilly and Leslies is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding OReilly Automotive and Leslies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leslies and OReilly Automotive 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 OReilly Automotive are associated (or correlated) with Leslies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leslies has no effect on the direction of OReilly Automotive i.e., OReilly Automotive and Leslies go up and down completely randomly.
Pair Corralation between OReilly Automotive and Leslies
Given the investment horizon of 90 days OReilly Automotive is expected to generate 6.07 times less return on investment than Leslies. But when comparing it to its historical volatility, OReilly Automotive is 3.04 times less risky than Leslies. It trades about 0.1 of its potential returns per unit of risk. Leslies is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 288.00 in Leslies on August 28, 2024 and sell it today you would earn a total of 63.00 from holding Leslies or generate 21.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OReilly Automotive vs. Leslies
Performance |
| Timeline |
| OReilly Automotive |
| Leslies |
OReilly Automotive and Leslies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OReilly Automotive and Leslies
The main advantage of trading using opposite OReilly Automotive and Leslies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OReilly Automotive position performs unexpectedly, Leslies 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 Leslies will offset losses from the drop in Leslies' long position.| OReilly Automotive vs. Kingsway Financial Services | OReilly Automotive vs. KAR Auction Services | OReilly Automotive vs. Cango Inc | OReilly Automotive vs. Vroom Inc |
| Leslies vs. Sally Beauty Holdings | Leslies vs. ODP Corp | Leslies vs. 1 800 FLOWERSCOM | Leslies vs. Caseys General Stores |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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