Correlation Between Lennox International and DarioHealth Corp
Can any of the company-specific risk be diversified away by investing in both Lennox International and DarioHealth Corp 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 Lennox International and DarioHealth Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lennox International and DarioHealth Corp, you can compare the effects of market volatilities on Lennox International and DarioHealth Corp 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 Lennox International with a short position of DarioHealth Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lennox International and DarioHealth Corp.
Diversification Opportunities for Lennox International and DarioHealth Corp
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lennox and DarioHealth is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Lennox International and DarioHealth Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DarioHealth Corp and Lennox 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 Lennox International are associated (or correlated) with DarioHealth Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DarioHealth Corp has no effect on the direction of Lennox International i.e., Lennox International and DarioHealth Corp go up and down completely randomly.
Pair Corralation between Lennox International and DarioHealth Corp
Considering the 90-day investment horizon Lennox International is expected to generate 0.33 times more return on investment than DarioHealth Corp. However, Lennox International is 2.99 times less risky than DarioHealth Corp. It trades about 0.09 of its potential returns per unit of risk. DarioHealth Corp is currently generating about -0.01 per unit of risk. If you would invest 20,731 in Lennox International on January 25, 2024 and sell it today you would earn a total of 26,935 from holding Lennox International or generate 129.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lennox International vs. DarioHealth Corp
Performance |
| Timeline |
| Lennox International |
| DarioHealth Corp |
Lennox International and DarioHealth Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lennox International and DarioHealth Corp
The main advantage of trading using opposite Lennox International and DarioHealth Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lennox International position performs unexpectedly, DarioHealth Corp 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 DarioHealth Corp will offset losses from the drop in DarioHealth Corp's long position.| Lennox International vs. Janus International Group | Lennox International vs. Interface | Lennox International vs. Beacon Roofing Supply | Lennox International vs. Perma Pipe International Holdings |
| DarioHealth Corp vs. HealthStream | DarioHealth Corp vs. National Research Corp | DarioHealth Corp vs. HealthEquity | DarioHealth Corp vs. Health Catalyst |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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