Correlation Between Woolworths Holdings and Lojas Renner
Can any of the company-specific risk be diversified away by investing in both Woolworths Holdings and Lojas Renner 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 Woolworths Holdings and Lojas Renner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Woolworths Holdings Ltd and Lojas Renner SA, you can compare the effects of market volatilities on Woolworths Holdings and Lojas Renner 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 Woolworths Holdings with a short position of Lojas Renner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woolworths Holdings and Lojas Renner.
Diversification Opportunities for Woolworths Holdings and Lojas Renner
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Woolworths and Lojas is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Woolworths Holdings Ltd and Lojas Renner SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lojas Renner SA and Woolworths Holdings 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 Woolworths Holdings Ltd are associated (or correlated) with Lojas Renner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lojas Renner SA has no effect on the direction of Woolworths Holdings i.e., Woolworths Holdings and Lojas Renner go up and down completely randomly.
Pair Corralation between Woolworths Holdings and Lojas Renner
If you would invest 362.00 in Woolworths Holdings Ltd on August 28, 2024 and sell it today you would earn a total of 36.00 from holding Woolworths Holdings Ltd or generate 9.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 1.59% |
| Values | Daily Returns |
Woolworths Holdings Ltd vs. Lojas Renner SA
Performance |
| Timeline |
| Woolworths Holdings |
| Lojas Renner SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Woolworths Holdings and Lojas Renner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woolworths Holdings and Lojas Renner
The main advantage of trading using opposite Woolworths Holdings and Lojas Renner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woolworths Holdings position performs unexpectedly, Lojas Renner 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 Lojas Renner will offset losses from the drop in Lojas Renner's long position.| Woolworths Holdings vs. Kohls Corp | Woolworths Holdings vs. Nordstrom | Woolworths Holdings vs. Macys Inc | Woolworths Holdings vs. Dillards |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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