Correlation Between Duluth Holdings and HomesToLife

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

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

Diversification Opportunities for Duluth Holdings and HomesToLife

-0.54

Correlation Coefficient

Duluth Holdings  HomesToLife

Excellent diversification

The 3 months correlation between Duluth and HomesToLife is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Duluth Holdings and HomesToLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HomesToLife and Duluth Holdings 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 Duluth Holdings are associated (or correlated) with HomesToLife. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HomesToLife has no effect on the direction of Duluth Holdings i.e., Duluth Holdings and HomesToLife go up and down completely randomly.

Pair Corralation between Duluth Holdings and HomesToLife

Given the investment horizon of 90 days Duluth Holdings is expected to generate 2.7 times more return on investment than HomesToLife. However, Duluth Holdings is 2.7 times more volatile than HomesToLife. It trades about 0.08 of its potential returns per unit of risk. HomesToLife is currently generating about 0.04 per unit of risk. If you would invest  177.00  in Duluth Holdings on May 4, 2025 and sell it today you would earn a total of  34.00  from holding Duluth Holdings or generate 19.21% return on investment over 90 days.

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

Duluth Holdings  vs.  HomesToLife

Duluth Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Duluth Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Duluth Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

HomesToLife

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in HomesToLife are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy essential indicators, HomesToLife is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Duluth Holdings and HomesToLife

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

The idea behind Duluth Holdings and HomesToLife 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..