Correlation Between Hour Loop and Lands End

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

By analyzing existing cross correlation between Hour Loop and Lands End, you can compare the effects of market volatilities on Hour Loop 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 Hour Loop with a short position of Lands End. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hour Loop and Lands End.

Diversification Opportunities for Hour Loop and Lands End

-0.72

Correlation Coefficient

Hour Loop  Lands End

Pay attention - limited upside

The 3 months correlation between Hour and Lands is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Hour Loop and Lands End in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lands End and Hour Loop 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 Hour Loop 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 Hour Loop i.e., Hour Loop and Lands End go up and down completely randomly.

Pair Corralation between Hour Loop and Lands End

Given the investment horizon of 90 days Hour Loop is expected to under-perform the Lands End. In addition to that, Hour Loop is 1.53 times more volatile than Lands End. It trades about -0.04 of its total potential returns per unit of risk. Lands End is currently generating about 0.19 per unit of volatility. If you would invest  1,131  in Lands End on January 30, 2024 and sell it today you would earn a total of  170.00  from holding Lands End or generate 15.03% return on investment over 90 days.

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

Hour Loop  vs.  Lands End

Hour Loop

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hour Loop has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest inconsistent performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Lands End

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lands End are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Lands End exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hour Loop and Lands End

The main advantage of trading using opposite Hour Loop and Lands End positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hour Loop 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 Hour Loop 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.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.