Correlation Between Vodka Brands and LEGGETT
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By analyzing existing cross correlation between Vodka Brands Corp and LEGGETT PLATT INC, you can compare the effects of market volatilities on Vodka Brands and LEGGETT 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 Vodka Brands with a short position of LEGGETT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vodka Brands and LEGGETT.
Diversification Opportunities for Vodka Brands and LEGGETT
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vodka and LEGGETT is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Vodka Brands Corp and LEGGETT PLATT INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LEGGETT PLATT INC and Vodka Brands 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 Vodka Brands Corp are associated (or correlated) with LEGGETT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LEGGETT PLATT INC has no effect on the direction of Vodka Brands i.e., Vodka Brands and LEGGETT go up and down completely randomly.
Pair Corralation between Vodka Brands and LEGGETT
Given the investment horizon of 90 days Vodka Brands is expected to generate 8.99 times less return on investment than LEGGETT. But when comparing it to its historical volatility, Vodka Brands Corp is 5.73 times less risky than LEGGETT. It trades about 0.03 of its potential returns per unit of risk. LEGGETT PLATT INC is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 9,298 in LEGGETT PLATT INC on September 11, 2024 and sell it today you would earn a total of 113.00 from holding LEGGETT PLATT INC or generate 1.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 85.45% |
Values | Daily Returns |
Vodka Brands Corp vs. LEGGETT PLATT INC
Performance |
Timeline |
Vodka Brands Corp |
LEGGETT PLATT INC |
Vodka Brands and LEGGETT Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Vodka Brands and LEGGETT
The main advantage of trading using opposite Vodka Brands and LEGGETT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vodka Brands position performs unexpectedly, LEGGETT 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 LEGGETT will offset losses from the drop in LEGGETT's long position.Vodka Brands vs. Brown Forman | Vodka Brands vs. Brown Forman | Vodka Brands vs. Eastside Distilling | Vodka Brands vs. Diageo PLC ADR |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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