Correlation Between Vera Bradley and Lakeland Industries
Can any of the company-specific risk be diversified away by investing in both Vera Bradley and Lakeland Industries 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 Vera Bradley and Lakeland Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vera Bradley and Lakeland Industries, you can compare the effects of market volatilities on Vera Bradley and Lakeland Industries 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 Vera Bradley with a short position of Lakeland Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vera Bradley and Lakeland Industries.
Diversification Opportunities for Vera Bradley and Lakeland Industries
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vera and Lakeland is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Vera Bradley and Lakeland Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lakeland Industries and Vera Bradley 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 Vera Bradley are associated (or correlated) with Lakeland Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lakeland Industries has no effect on the direction of Vera Bradley i.e., Vera Bradley and Lakeland Industries go up and down completely randomly.
Pair Corralation between Vera Bradley and Lakeland Industries
Considering the 90-day investment horizon Vera Bradley is expected to generate 1.15 times less return on investment than Lakeland Industries. But when comparing it to its historical volatility, Vera Bradley is 1.07 times less risky than Lakeland Industries. It trades about 0.21 of its potential returns per unit of risk. Lakeland Industries is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,941 in Lakeland Industries on August 31, 2024 and sell it today you would earn a total of 242.00 from holding Lakeland Industries or generate 12.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vera Bradley vs. Lakeland Industries
Performance |
| Timeline |
| Vera Bradley |
| Lakeland Industries |
Vera Bradley and Lakeland Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vera Bradley and Lakeland Industries
The main advantage of trading using opposite Vera Bradley and Lakeland Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vera Bradley position performs unexpectedly, Lakeland Industries 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 Lakeland Industries will offset losses from the drop in Lakeland Industries' long position.| Vera Bradley vs. Rocky Brands | Vera Bradley vs. Steven Madden | Vera Bradley vs. Caleres | Vera Bradley vs. Weyco Group |
| Lakeland Industries vs. Vince Holding Corp | Lakeland Industries vs. Oxford Industries | Lakeland Industries vs. Gildan Activewear | Lakeland Industries vs. Columbia Sportswear |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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