Correlation Between Williams Sonoma and Leslies
Can any of the company-specific risk be diversified away by investing in both Williams Sonoma and Leslies 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 Williams Sonoma and Leslies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Williams Sonoma and Leslies, you can compare the effects of market volatilities on Williams Sonoma and Leslies 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 Williams Sonoma with a short position of Leslies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Williams Sonoma and Leslies.
Diversification Opportunities for Williams Sonoma and Leslies
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Williams and Leslies is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Williams Sonoma and Leslies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leslies and Williams Sonoma 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 Williams Sonoma are associated (or correlated) with Leslies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leslies has no effect on the direction of Williams Sonoma i.e., Williams Sonoma and Leslies go up and down completely randomly.
Pair Corralation between Williams Sonoma and Leslies
Considering the 90-day investment horizon Williams Sonoma is expected to generate 0.63 times more return on investment than Leslies. However, Williams Sonoma is 1.58 times less risky than Leslies. It trades about 0.39 of its potential returns per unit of risk. Leslies is currently generating about 0.1 per unit of risk. If you would invest 17,908 in Williams Sonoma on October 20, 2024 and sell it today you would earn a total of 2,375 from holding Williams Sonoma or generate 13.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Williams Sonoma vs. Leslies
Performance |
| Timeline |
| Williams Sonoma |
| Leslies |
Williams Sonoma and Leslies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Williams Sonoma and Leslies
The main advantage of trading using opposite Williams Sonoma and Leslies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Williams Sonoma position performs unexpectedly, Leslies 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 Leslies will offset losses from the drop in Leslies' long position.| Williams Sonoma vs. AutoZone | Williams Sonoma vs. Ulta Beauty | Williams Sonoma vs. Best Buy Co | Williams Sonoma vs. RH |
| Leslies vs. Sally Beauty Holdings | Leslies vs. ODP Corp | Leslies vs. 1 800 FLOWERSCOM | Leslies vs. Caseys General Stores |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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