Correlation Between VOXX International and Lennar
Can any of the company-specific risk be diversified away by investing in both VOXX International and Lennar 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 VOXX International and Lennar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VOXX International and Lennar, you can compare the effects of market volatilities on VOXX International and Lennar 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 VOXX International with a short position of Lennar. Check out your portfolio center. Please also check ongoing floating volatility patterns of VOXX International and Lennar.
Diversification Opportunities for VOXX International and Lennar
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between VOXX and Lennar is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding VOXX International and Lennar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lennar and VOXX International 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 VOXX International are associated (or correlated) with Lennar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lennar has no effect on the direction of VOXX International i.e., VOXX International and Lennar go up and down completely randomly.
Pair Corralation between VOXX International and Lennar
Given the investment horizon of 90 days VOXX International is expected to generate 2.84 times less return on investment than Lennar. In addition to that, VOXX International is 2.95 times more volatile than Lennar. It trades about 0.01 of its total potential returns per unit of risk. Lennar is currently generating about 0.07 per unit of volatility. If you would invest 10,982 in Lennar on August 27, 2024 and sell it today you would earn a total of 5,935 from holding Lennar or generate 54.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VOXX International vs. Lennar
Performance |
| Timeline |
| VOXX International |
| Lennar |
VOXX International and Lennar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VOXX International and Lennar
The main advantage of trading using opposite VOXX International and Lennar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VOXX International position performs unexpectedly, Lennar 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 Lennar will offset losses from the drop in Lennar's long position.| VOXX International vs. LG Display Co | VOXX International vs. Vizio Holding Corp | VOXX International vs. Turtle Beach Corp | VOXX International vs. Emerson Radio |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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