Correlation Between LEGGETT and Vodka Brands
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By analyzing existing cross correlation between LEGGETT PLATT INC and Vodka Brands Corp, you can compare the effects of market volatilities on LEGGETT and Vodka Brands 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 LEGGETT with a short position of Vodka Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of LEGGETT and Vodka Brands.
Diversification Opportunities for LEGGETT and Vodka Brands
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between LEGGETT and Vodka is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding LEGGETT PLATT INC and Vodka Brands Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vodka Brands Corp and LEGGETT 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 LEGGETT PLATT INC are associated (or correlated) with Vodka Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vodka Brands Corp has no effect on the direction of LEGGETT i.e., LEGGETT and Vodka Brands go up and down completely randomly.
Pair Corralation between LEGGETT and Vodka Brands
Assuming the 90 days trading horizon LEGGETT PLATT INC is expected to under-perform the Vodka Brands. But the bond apears to be less risky and, when comparing its historical volatility, LEGGETT PLATT INC is 6.75 times less risky than Vodka Brands. The bond trades about -0.07 of its potential returns per unit of risk. The Vodka Brands Corp is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 85.00 in Vodka Brands Corp on September 5, 2024 and sell it today you would earn a total of 27.00 from holding Vodka Brands Corp or generate 31.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
LEGGETT PLATT INC vs. Vodka Brands Corp
Performance |
| Timeline |
| LEGGETT PLATT INC |
| Vodka Brands Corp |
LEGGETT and Vodka Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LEGGETT and Vodka Brands
The main advantage of trading using opposite LEGGETT and Vodka Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LEGGETT position performs unexpectedly, Vodka Brands 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 Vodka Brands will offset losses from the drop in Vodka Brands' long position.The idea behind LEGGETT PLATT INC and Vodka Brands Corp 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.| Vodka Brands vs. Diageo PLC ADR | Vodka Brands vs. Constellation Brands Class | Vodka Brands vs. Brown Forman | Vodka Brands vs. Davide Campari Milano NV |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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