Correlation Between Leggett Platt and Oshkosh
Can any of the company-specific risk be diversified away by investing in both Leggett Platt and Oshkosh 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 Leggett Platt and Oshkosh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leggett Platt Incorporated and Oshkosh, you can compare the effects of market volatilities on Leggett Platt and Oshkosh 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 Leggett Platt with a short position of Oshkosh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leggett Platt and Oshkosh.
Diversification Opportunities for Leggett Platt and Oshkosh
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Leggett and Oshkosh is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Leggett Platt Incorporated and Oshkosh in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oshkosh and Leggett Platt 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 Leggett Platt Incorporated are associated (or correlated) with Oshkosh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oshkosh has no effect on the direction of Leggett Platt i.e., Leggett Platt and Oshkosh go up and down completely randomly.
Pair Corralation between Leggett Platt and Oshkosh
Considering the 90-day investment horizon Leggett Platt Incorporated is expected to under-perform the Oshkosh. In addition to that, Leggett Platt is 1.32 times more volatile than Oshkosh. It trades about -0.15 of its total potential returns per unit of risk. Oshkosh is currently generating about -0.01 per unit of volatility. If you would invest 11,845 in Oshkosh on January 20, 2024 and sell it today you would lose (79.00) from holding Oshkosh or give up 0.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leggett Platt Incorporated vs. Oshkosh
Performance |
| Timeline |
| Leggett Platt rporated |
| Oshkosh |
Leggett Platt and Oshkosh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leggett Platt and Oshkosh
The main advantage of trading using opposite Leggett Platt and Oshkosh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leggett Platt position performs unexpectedly, Oshkosh 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 Oshkosh will offset losses from the drop in Oshkosh's long position.| Leggett Platt vs. Mohawk Industries | Leggett Platt vs. Tempur Sealy International | Leggett Platt vs. Ethan Allen Interiors | Leggett Platt vs. The Lovesac |
| Oshkosh vs. AGCO Corporation | Oshkosh vs. CNH Industrial NV | Oshkosh vs. Deere Company | Oshkosh vs. Lindsay |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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