Correlation Between Legacy Housing and Driven Brands

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

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

Diversification Opportunities for Legacy Housing and Driven Brands

0.46

Correlation Coefficient

Legacy Housing  Driven Brands

Very weak diversification

The 3 months correlation between Legacy and Driven is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Legacy Housing Corp and Driven Brands Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Driven Brands Holdings and Legacy Housing 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 Legacy Housing Corp are associated (or correlated) with Driven Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Driven Brands Holdings has no effect on the direction of Legacy Housing i.e., Legacy Housing and Driven Brands go up and down completely randomly.

Pair Corralation between Legacy Housing and Driven Brands

Given the investment horizon of 90 days Legacy Housing Corp is expected to generate 0.91 times more return on investment than Driven Brands. However, Legacy Housing Corp is 1.1 times less risky than Driven Brands. It trades about 0.21 of its potential returns per unit of risk. Driven Brands Holdings is currently generating about 0.06 per unit of risk. If you would invest  2,258  in Legacy Housing Corp on June 10, 2025 and sell it today you would earn a total of  548.00  from holding Legacy Housing Corp or generate 24.27% return on investment over 90 days.

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

Legacy Housing Corp  vs.  Driven Brands Holdings

Legacy Housing Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Legacy Housing Corp are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain technical and fundamental indicators, Legacy Housing demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Driven Brands Holdings

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Driven Brands Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Driven Brands may actually be approaching a critical reversion point that can send shares even higher in October 2025.

Pair Trading with Legacy Housing and Driven Brands

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

The idea behind Legacy Housing Corp and Driven Brands 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.

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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.