Correlation Between Daily Journal and Lowes Companies
Can any of the company-specific risk be diversified away by investing in both Daily Journal and Lowes Companies 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 Daily Journal and Lowes Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daily Journal Corp and Lowes Companies, you can compare the effects of market volatilities on Daily Journal and Lowes Companies 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 Daily Journal with a short position of Lowes Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daily Journal and Lowes Companies.
Diversification Opportunities for Daily Journal and Lowes Companies
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daily and Lowes is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Daily Journal Corp and Lowes Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lowes Companies and Daily Journal 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 Daily Journal Corp are associated (or correlated) with Lowes Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lowes Companies has no effect on the direction of Daily Journal i.e., Daily Journal and Lowes Companies go up and down completely randomly.
Pair Corralation between Daily Journal and Lowes Companies
Given the investment horizon of 90 days Daily Journal Corp is expected to generate 1.67 times more return on investment than Lowes Companies. However, Daily Journal is 1.67 times more volatile than Lowes Companies. It trades about -0.12 of its potential returns per unit of risk. Lowes Companies is currently generating about -0.24 per unit of risk. If you would invest 36,065 in Daily Journal Corp on January 19, 2024 and sell it today you would lose (2,543) from holding Daily Journal Corp or give up 7.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daily Journal Corp vs. Lowes Companies
Performance |
| Timeline |
| Daily Journal Corp |
| Lowes Companies |
Daily Journal and Lowes Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daily Journal and Lowes Companies
The main advantage of trading using opposite Daily Journal and Lowes Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daily Journal position performs unexpectedly, Lowes Companies 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 Lowes Companies will offset losses from the drop in Lowes Companies' long position.| Daily Journal vs. American Software | Daily Journal vs. Meridianlink | Daily Journal vs. Model N | Daily Journal vs. CoreCard Corp |
| Lowes Companies vs. Floor Decor Holdings | Lowes Companies vs. LL Flooring Holdings | Lowes Companies vs. Arhaus Inc | Lowes Companies vs. Haverty Furniture Companies |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |