Correlation Between Lachish and Best Buy
Can any of the company-specific risk be diversified away by investing in both Lachish and Best Buy 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 Lachish and Best Buy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lachish and Best Buy Co, you can compare the effects of market volatilities on Lachish and Best Buy 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 Lachish with a short position of Best Buy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lachish and Best Buy.
Diversification Opportunities for Lachish and Best Buy
Pay attention - limited upside
The 3 months correlation between Lachish and Best is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lachish and Best Buy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Best Buy and Lachish 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 Lachish are associated (or correlated) with Best Buy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Best Buy has no effect on the direction of Lachish i.e., Lachish and Best Buy go up and down completely randomly.
Pair Corralation between Lachish and Best Buy
Assuming the 90 days trading horizon Lachish is expected to generate 1.35 times more return on investment than Best Buy. However, Lachish is 1.35 times more volatile than Best Buy Co. It trades about 0.13 of its potential returns per unit of risk. Best Buy Co is currently generating about 0.04 per unit of risk. If you would invest 98,155 in Lachish on January 26, 2024 and sell it today you would earn a total of 146,845 from holding Lachish or generate 149.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 79.73% |
| Values | Daily Returns |
Lachish vs. Best Buy Co
Performance |
| Timeline |
| Lachish |
| Best Buy |
Lachish and Best Buy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lachish and Best Buy
The main advantage of trading using opposite Lachish and Best Buy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lachish position performs unexpectedly, Best Buy 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 Best Buy will offset losses from the drop in Best Buy's long position.| Lachish vs. Alony Hetz Properties | Lachish vs. Melisron | Lachish vs. Shufersal | Lachish 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |