Correlation Between View and Latham
Can any of the company-specific risk be diversified away by investing in both View and Latham 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 View and Latham into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between View Inc and Latham Group, you can compare the effects of market volatilities on View and Latham 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 View with a short position of Latham. Check out your portfolio center. Please also check ongoing floating volatility patterns of View and Latham.
Diversification Opportunities for View and Latham
Pay attention - limited upside
The 3 months correlation between View and Latham is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding View Inc and Latham Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Latham Group and View 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 View Inc are associated (or correlated) with Latham. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Latham Group has no effect on the direction of View i.e., View and Latham go up and down completely randomly.
Pair Corralation between View and Latham
Assuming the 90 days horizon View Inc is expected to under-perform the Latham. In addition to that, View is 2.31 times more volatile than Latham Group. It trades about -0.06 of its total potential returns per unit of risk. Latham Group is currently generating about 0.04 per unit of volatility. If you would invest 440.00 in Latham Group on October 25, 2024 and sell it today you would earn a total of 265.00 from holding Latham Group or generate 60.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 22.67% |
| Values | Daily Returns |
View Inc vs. Latham Group
Performance |
| Timeline |
| View Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Latham Group |
View and Latham Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with View and Latham
The main advantage of trading using opposite View and Latham positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if View position performs unexpectedly, Latham 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 Latham will offset losses from the drop in Latham's long position.The idea behind View Inc and Latham Group 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.| Latham vs. Janus International Group | Latham vs. Quanex Building Products | Latham vs. GMS Inc | Latham vs. Gibraltar Industries |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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