Correlation Between 1 800 and Lands End
Can any of the company-specific risk be diversified away by investing in both 1 800 and Lands End 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 1 800 and Lands End into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 1 800 FLOWERSCOM and Lands End, you can compare the effects of market volatilities on 1 800 and Lands End 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 1 800 with a short position of Lands End. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1 800 and Lands End.
Diversification Opportunities for 1 800 and Lands End
Excellent diversification
The 3 months correlation between FLWS and Lands is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding 1 800 FLOWERSCOM and Lands End in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lands End and 1 800 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 1 800 FLOWERSCOM are associated (or correlated) with Lands End. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lands End has no effect on the direction of 1 800 i.e., 1 800 and Lands End go up and down completely randomly.
Pair Corralation between 1 800 and Lands End
Given the investment horizon of 90 days 1 800 FLOWERSCOM is expected to under-perform the Lands End. But the stock apears to be less risky and, when comparing its historical volatility, 1 800 FLOWERSCOM is 2.11 times less risky than Lands End. The stock trades about -0.45 of its potential returns per unit of risk. The Lands End is currently generating about 0.51 of returns per unit of risk over similar time horizon. If you would invest 815.00 in Lands End on January 20, 2024 and sell it today you would earn a total of 475.00 from holding Lands End or generate 58.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
1 800 FLOWERSCOM vs. Lands End
Performance |
| Timeline |
| 1 800 FLOWERSCOM |
| Lands End |
1 800 and Lands End Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 1 800 and Lands End
The main advantage of trading using opposite 1 800 and Lands End positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1 800 position performs unexpectedly, Lands End 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 Lands End will offset losses from the drop in Lands End's long position.The idea behind 1 800 FLOWERSCOM and Lands End 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.| Lands End vs. Shoe Carnival | Lands End vs. Hibbett Sports | Lands End vs. Citi Trends | Lands End vs. Zumiez Inc |
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 AI Investment Finder module to use AI to screen and filter profitable investment opportunities.
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