Correlation Between Tandy Leather and Life Insurance
Can any of the company-specific risk be diversified away by investing in both Tandy Leather and Life Insurance 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 Tandy Leather and Life Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tandy Leather Factory and Life Insurance, you can compare the effects of market volatilities on Tandy Leather and Life Insurance 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 Tandy Leather with a short position of Life Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tandy Leather and Life Insurance.
Diversification Opportunities for Tandy Leather and Life Insurance
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tandy and Life is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Tandy Leather Factory and Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Insurance and Tandy Leather 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 Tandy Leather Factory are associated (or correlated) with Life Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Life Insurance has no effect on the direction of Tandy Leather i.e., Tandy Leather and Life Insurance go up and down completely randomly.
Pair Corralation between Tandy Leather and Life Insurance
Considering the 90-day investment horizon Tandy Leather Factory is expected to generate 0.87 times more return on investment than Life Insurance. However, Tandy Leather Factory is 1.15 times less risky than Life Insurance. It trades about 0.02 of its potential returns per unit of risk. Life Insurance is currently generating about -0.08 per unit of risk. If you would invest 447.00 in Tandy Leather Factory on September 14, 2024 and sell it today you would earn a total of 34.00 from holding Tandy Leather Factory or generate 7.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 64.3% |
| Values | Daily Returns |
Tandy Leather Factory vs. Life Insurance
Performance |
| Timeline |
| Tandy Leather Factory |
| Life Insurance |
Tandy Leather and Life Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tandy Leather and Life Insurance
The main advantage of trading using opposite Tandy Leather and Life Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tandy Leather position performs unexpectedly, Life Insurance 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 Life Insurance will offset losses from the drop in Life Insurance's long position.| Tandy Leather vs. Green River Gold | Tandy Leather vs. Dixons Carphone plc | Tandy Leather vs. Ceconomy AG ADR | Tandy Leather vs. Winmark |
| Life Insurance vs. Tandy Leather Factory | Life Insurance vs. Burlington Stores | Life Insurance vs. Inflection Point Acquisition | Life Insurance vs. Jacobs Solutions |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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