Correlation Between SVB Financial and Lowes Companies
Can any of the company-specific risk be diversified away by investing in both SVB Financial and Lowes Companies 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 SVB Financial and Lowes Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SVB Financial Group and Lowes Companies, you can compare the effects of market volatilities on SVB Financial and Lowes Companies 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 SVB Financial with a short position of Lowes Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of SVB Financial and Lowes Companies.
Diversification Opportunities for SVB Financial and Lowes Companies
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SVB and Lowes is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SVB Financial Group and Lowes Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lowes Companies and SVB Financial 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 SVB Financial Group are associated (or correlated) with Lowes Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lowes Companies has no effect on the direction of SVB Financial i.e., SVB Financial and Lowes Companies go up and down completely randomly.
Pair Corralation between SVB Financial and Lowes Companies
Assuming the 90 days trading horizon SVB Financial Group is expected to under-perform the Lowes Companies. In addition to that, SVB Financial is 1.75 times more volatile than Lowes Companies. It trades about -0.05 of its total potential returns per unit of risk. Lowes Companies is currently generating about 0.06 per unit of volatility. If you would invest 5,387 in Lowes Companies on September 5, 2024 and sell it today you would earn a total of 2,885 from holding Lowes Companies or generate 53.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.0% |
| Values | Daily Returns |
SVB Financial Group vs. Lowes Companies
Performance |
| Timeline |
| SVB Financial Group |
| Lowes Companies |
SVB Financial and Lowes Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SVB Financial and Lowes Companies
The main advantage of trading using opposite SVB Financial and Lowes Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SVB Financial position performs unexpectedly, Lowes Companies 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 Lowes Companies will offset losses from the drop in Lowes Companies' long position.| SVB Financial vs. Charter Communications | SVB Financial vs. Unifique Telecomunicaes SA | SVB Financial vs. G2D Investments | SVB Financial vs. Apartment Investment and |
| Lowes Companies vs. MAHLE Metal Leve | Lowes Companies vs. Mitsubishi UFJ Financial | Lowes Companies vs. SVB Financial Group | Lowes Companies vs. Taiwan Semiconductor Manufacturing |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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