Correlation Between Rocky Brands and Lands End
Can any of the company-specific risk be diversified away by investing in both Rocky Brands and Lands End 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 Rocky Brands and Lands End into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rocky Brands and Lands End, you can compare the effects of market volatilities on Rocky Brands and Lands End 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 Rocky Brands with a short position of Lands End. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rocky Brands and Lands End.
Diversification Opportunities for Rocky Brands and Lands End
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Rocky and Lands is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Rocky Brands and Lands End in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lands End and Rocky Brands 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 Rocky Brands are associated (or correlated) with Lands End. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lands End has no effect on the direction of Rocky Brands i.e., Rocky Brands and Lands End go up and down completely randomly.
Pair Corralation between Rocky Brands and Lands End
Given the investment horizon of 90 days Rocky Brands is expected to generate 1.12 times more return on investment than Lands End. However, Rocky Brands is 1.12 times more volatile than Lands End. It trades about 0.2 of its potential returns per unit of risk. Lands End is currently generating about 0.02 per unit of risk. If you would invest 2,271 in Rocky Brands on October 23, 2024 and sell it today you would earn a total of 181.00 from holding Rocky Brands or generate 7.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rocky Brands vs. Lands End
Performance |
| Timeline |
| Rocky Brands |
| Lands End |
Rocky Brands and Lands End Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rocky Brands and Lands End
The main advantage of trading using opposite Rocky Brands and Lands End positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rocky Brands position performs unexpectedly, Lands End 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 Lands End will offset losses from the drop in Lands End's long position.| Rocky Brands vs. Vera Bradley | Rocky Brands vs. Steven Madden | Rocky Brands vs. Wolverine World Wide | Rocky Brands vs. Caleres |
| Lands End vs. Vera Bradley | Lands End vs. Wolverine World Wide | Lands End vs. Rocky Brands | Lands End vs. Steven Madden |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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