Correlation Between Shoe Carnival and LOWES
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By analyzing existing cross correlation between Shoe Carnival and LOWES INC 6875, you can compare the effects of market volatilities on Shoe Carnival and LOWES 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 Shoe Carnival with a short position of LOWES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shoe Carnival and LOWES.
Diversification Opportunities for Shoe Carnival and LOWES
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shoe and LOWES is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Shoe Carnival and LOWES INC 6875 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOWES INC 6875 and Shoe Carnival 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 Shoe Carnival are associated (or correlated) with LOWES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOWES INC 6875 has no effect on the direction of Shoe Carnival i.e., Shoe Carnival and LOWES go up and down completely randomly.
Pair Corralation between Shoe Carnival and LOWES
Given the investment horizon of 90 days Shoe Carnival is expected to generate 2.16 times more return on investment than LOWES. However, Shoe Carnival is 2.16 times more volatile than LOWES INC 6875. It trades about 0.07 of its potential returns per unit of risk. LOWES INC 6875 is currently generating about 0.01 per unit of risk. If you would invest 2,137 in Shoe Carnival on September 12, 2024 and sell it today you would earn a total of 1,432 from holding Shoe Carnival or generate 67.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 77.21% |
| Values | Daily Returns |
Shoe Carnival vs. LOWES INC 6875
Performance |
| Timeline |
| Shoe Carnival |
| LOWES INC 6875 |
Shoe Carnival and LOWES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shoe Carnival and LOWES
The main advantage of trading using opposite Shoe Carnival and LOWES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shoe Carnival position performs unexpectedly, LOWES 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 will offset losses from the drop in LOWES's long position.| Shoe Carnival vs. Foot Locker | Shoe Carnival vs. Lands End | Shoe Carnival vs. Duluth Holdings | Shoe Carnival vs. Destination XL Group |
| LOWES vs. Simon Property Group | LOWES vs. Cardinal Health | LOWES vs. Tandem Diabetes Care | LOWES vs. ATRenew Inc DRC |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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