Correlation Between Clorox and Lesico
Can any of the company-specific risk be diversified away by investing in both Clorox and Lesico 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 Clorox and Lesico into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Clorox and Lesico, you can compare the effects of market volatilities on Clorox and Lesico 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 Clorox with a short position of Lesico. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clorox and Lesico.
Diversification Opportunities for Clorox and Lesico
Pay attention - limited upside
The 3 months correlation between Clorox and Lesico is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The Clorox and Lesico in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lesico and Clorox 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 The Clorox are associated (or correlated) with Lesico. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lesico has no effect on the direction of Clorox i.e., Clorox and Lesico go up and down completely randomly.
Pair Corralation between Clorox and Lesico
Considering the 90-day investment horizon The Clorox is expected to under-perform the Lesico. But the stock apears to be less risky and, when comparing its historical volatility, The Clorox is 2.29 times less risky than Lesico. The stock trades about -0.02 of its potential returns per unit of risk. The Lesico is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 29,890 in Lesico on January 26, 2024 and sell it today you would earn a total of 3,980 from holding Lesico or generate 13.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 76.19% |
| Values | Daily Returns |
The Clorox vs. Lesico
Performance |
| Timeline |
| Clorox |
| Lesico |
Clorox and Lesico Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clorox and Lesico
The main advantage of trading using opposite Clorox and Lesico positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clorox position performs unexpectedly, Lesico 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 Lesico will offset losses from the drop in Lesico's long position.| Clorox vs. Colgate Palmolive | Clorox vs. Honest Company | Clorox vs. Hims Hers Health | Clorox vs. European Wax Center |
| Lesico vs. Alony Hetz Properties | Lesico vs. Melisron | Lesico vs. Shufersal | Lesico vs. Israel Discount Bank |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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