Correlation Between Tandem Diabetes and LOWES

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Tandem Diabetes and LOWES 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 Tandem Diabetes and LOWES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tandem Diabetes Care and LOWES INC 6875, you can compare the effects of market volatilities on Tandem Diabetes 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 Tandem Diabetes with a short position of LOWES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tandem Diabetes and LOWES.

Diversification Opportunities for Tandem Diabetes and LOWES

0.8
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Tandem and LOWES is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Tandem Diabetes Care 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 Tandem Diabetes 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 Tandem Diabetes Care 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 Tandem Diabetes i.e., Tandem Diabetes and LOWES go up and down completely randomly.

Pair Corralation between Tandem Diabetes and LOWES

Given the investment horizon of 90 days Tandem Diabetes Care is expected to generate 3.48 times more return on investment than LOWES. However, Tandem Diabetes is 3.48 times more volatile than LOWES INC 6875. It trades about 0.14 of its potential returns per unit of risk. LOWES INC 6875 is currently generating about 0.03 per unit of risk. If you would invest  3,110  in Tandem Diabetes Care on September 13, 2024 and sell it today you would earn a total of  340.00  from holding Tandem Diabetes Care or generate 10.93% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy95.45%
ValuesDaily Returns

Tandem Diabetes Care  vs.  LOWES INC 6875

 Performance 
       Timeline  
Tandem Diabetes Care 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Tandem Diabetes Care has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
LOWES INC 6875 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days LOWES INC 6875 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, LOWES is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Tandem Diabetes and LOWES Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Tandem Diabetes and LOWES

The main advantage of trading using opposite Tandem Diabetes and LOWES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tandem Diabetes 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.
Tandem Diabetes vs. DexCom Inc
Tandem Diabetes vs. Inspire Medical Systems
Tandem Diabetes vs. Penumbra
Tandem Diabetes vs. Insulet
The idea behind Tandem Diabetes Care and LOWES INC 6875 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
LOWES vs. Zhihu Inc ADR
LOWES vs. Ecovyst
LOWES vs. NETGEAR
LOWES vs. Zedge Inc
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

Other Complementary Tools

Investing Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Portfolio Analyzer
Portfolio analysis module that provides access to portfolio diagnostics and optimization engine
Analyst Advice
Analyst recommendations and target price estimates broken down by several categories
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format


 
Macroaxis helps investors of all levels and skills to maximize the upside of all their holdings and minimize the risk associated with market volatility, economic swings, and company-specific events. View terms and conditions
 
Feedback Blog
Made with optimal in San Francisco
2024 Macroaxis LLC
COMMON DESTINATIONS
MAIN CATEGORIES
COMPANY