Correlation Between Lowes Companies and DISH Network

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Can any of the company-specific risk be diversified away by investing in both Lowes Companies and DISH Network 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 Lowes Companies and DISH Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lowes Companies and DISH Network, you can compare the effects of market volatilities on Lowes Companies and DISH Network 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 Lowes Companies with a short position of DISH Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lowes Companies and DISH Network.

Diversification Opportunities for Lowes Companies and DISH Network

-0.05
  Correlation Coefficient

Good diversification

The 3 months correlation between Lowes and DISH is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Lowes Companies and DISH Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DISH Network and Lowes Companies 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 Lowes Companies are associated (or correlated) with DISH Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DISH Network has no effect on the direction of Lowes Companies i.e., Lowes Companies and DISH Network go up and down completely randomly.

Pair Corralation between Lowes Companies and DISH Network

If you would invest  23,539  in Lowes Companies on December 29, 2023 and sell it today you would earn a total of  1,794  from holding Lowes Companies or generate 7.62% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy4.55%
ValuesDaily Returns

Lowes Companies  vs.  DISH Network

 Performance 
       Timeline  
Lowes Companies 

Risk-Adjusted Performance

13 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Lowes Companies are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Lowes Companies showed solid returns over the last few months and may actually be approaching a breakup point.
DISH Network 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days DISH Network has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, DISH Network is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Lowes Companies and DISH Network Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lowes Companies and DISH Network

The main advantage of trading using opposite Lowes Companies and DISH Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lowes Companies position performs unexpectedly, DISH Network 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 DISH Network will offset losses from the drop in DISH Network's long position.
The idea behind Lowes Companies and DISH Network 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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