Correlation Between Lennox International and Barclays Capital

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Can any of the company-specific risk be diversified away by investing in both Lennox International and Barclays Capital 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 Barclays Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lennox International and Barclays Capital, you can compare the effects of market volatilities on Lennox International and Barclays Capital 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 Barclays Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lennox International and Barclays Capital.

Diversification Opportunities for Lennox International and Barclays Capital

0.06
  Correlation Coefficient

Significant diversification

The 3 months correlation between Lennox and Barclays is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Lennox International and Barclays Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays Capital 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 Barclays Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays Capital has no effect on the direction of Lennox International i.e., Lennox International and Barclays Capital go up and down completely randomly.

Pair Corralation between Lennox International and Barclays Capital

If you would invest  46,904  in Lennox International on December 29, 2023 and sell it today you would earn a total of  1,764  from holding Lennox International or generate 3.76% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy4.55%
ValuesDaily Returns

Lennox International  vs.  Barclays Capital

 Performance 
       Timeline  
Lennox International 

Risk-Adjusted Performance

7 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Lennox International are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady forward indicators, Lennox International may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Barclays Capital 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Barclays Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward indicators, Barclays Capital is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Lennox International and Barclays Capital Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lennox International and Barclays Capital

The main advantage of trading using opposite Lennox International and Barclays Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lennox International position performs unexpectedly, Barclays Capital 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 Barclays Capital will offset losses from the drop in Barclays Capital's long position.
The idea behind Lennox International and Barclays Capital pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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