Correlation Between Seer and LL Flooring

Can any of the company-specific risk be diversified away by investing in both Seer and LL Flooring 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 Seer and LL Flooring into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Seer Inc and LL Flooring Holdings, you can compare the effects of market volatilities on Seer and LL Flooring 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 Seer with a short position of LL Flooring. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seer and LL Flooring.

Diversification Opportunities for Seer and LL Flooring

0.58

Correlation Coefficient

Seer  LL Flooring

Very weak diversification

The 3 months correlation between Seer and LL Flooring is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Seer Inc and LL Flooring Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LL Flooring Holdings and Seer 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 Seer Inc are associated (or correlated) with LL Flooring. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LL Flooring Holdings has no effect on the direction of Seer i.e., Seer and LL Flooring go up and down completely randomly.

Pair Corralation between Seer and LL Flooring

Given the investment horizon of 90 days Seer is expected to generate 1.04 times less return on investment than LL Flooring. In addition to that, Seer is 1.01 times more volatile than LL Flooring Holdings. It trades about 0.21 of its total potential returns per unit of risk. LL Flooring Holdings is currently generating about 0.22 per unit of volatility. If you would invest  159.00  in LL Flooring Holdings on March 18, 2024 and sell it today you would earn a total of  222.00  from holding LL Flooring Holdings or generate 139.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Seer Inc  vs.  LL Flooring Holdings

Seer Inc

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Seer Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain technical and fundamental indicators, Seer reported solid returns over the last few months and may actually be approaching a breakup point.

LL Flooring Holdings

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in LL Flooring Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile essential indicators, LL Flooring disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Seer and LL Flooring

The main advantage of trading using opposite Seer and LL Flooring positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seer position performs unexpectedly, LL Flooring 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 LL Flooring will offset losses from the drop in LL Flooring's long position.

The idea behind Seer Inc and LL Flooring Holdings 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.