Correlation Between Lennar and Hugo Boss
Can any of the company-specific risk be diversified away by investing in both Lennar and Hugo Boss 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 Lennar and Hugo Boss into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lennar and Hugo Boss AG, you can compare the effects of market volatilities on Lennar and Hugo Boss 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 Lennar with a short position of Hugo Boss. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lennar and Hugo Boss.
Diversification Opportunities for Lennar and Hugo Boss
Very good diversification
The 3 months correlation between Lennar and Hugo is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Lennar and Hugo Boss AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hugo Boss AG and Lennar 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 Lennar are associated (or correlated) with Hugo Boss. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hugo Boss AG has no effect on the direction of Lennar i.e., Lennar and Hugo Boss go up and down completely randomly.
Pair Corralation between Lennar and Hugo Boss
Considering the 90-day investment horizon Lennar is expected to generate 0.95 times more return on investment than Hugo Boss. However, Lennar is 1.06 times less risky than Hugo Boss. It trades about -0.04 of its potential returns per unit of risk. Hugo Boss AG is currently generating about -0.15 per unit of risk. If you would invest 15,964 in Lennar on January 19, 2024 and sell it today you would lose (394.50) from holding Lennar or give up 2.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lennar vs. Hugo Boss AG
Performance |
| Timeline |
| Lennar |
| Hugo Boss AG |
Lennar and Hugo Boss Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lennar and Hugo Boss
The main advantage of trading using opposite Lennar and Hugo Boss positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lennar position performs unexpectedly, Hugo Boss 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 Hugo Boss will offset losses from the drop in Hugo Boss' long position.The idea behind Lennar and Hugo Boss AG 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.| Hugo Boss vs. Consolidated Communications Holdings | Hugo Boss vs. SAN MIGUEL BREWERY | Hugo Boss vs. Verizon Communications | Hugo Boss vs. China Resources Beer |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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