Correlation Between Duluth Holdings and Lands End

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

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

Diversification Opportunities for Duluth Holdings and Lands End

0.75

Correlation Coefficient

Duluth Holdings  Lands End

Poor diversification

The 3 months correlation between Duluth and Lands is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Duluth Holdings and Lands End in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lands End 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 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 Duluth Holdings i.e., Duluth Holdings and Lands End go up and down completely randomly.

Pair Corralation between Duluth Holdings and Lands End

Given the investment horizon of 90 days Duluth Holdings is expected to under-perform the Lands End. In addition to that, Duluth Holdings is 1.08 times more volatile than Lands End. It trades about -0.2 of its total potential returns per unit of risk. Lands End is currently generating about -0.07 per unit of volatility. If you would invest  1,317  in Lands End on December 28, 2024 and sell it today you would lose (231.00) from holding Lands End or give up 17.54% of portfolio value over 90 days.

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

Duluth Holdings  vs.  Lands End

Duluth Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Duluth Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Lands End

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lands End has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Duluth Holdings and Lands End

The main advantage of trading using opposite Duluth Holdings and Lands End positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duluth Holdings 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 Duluth Holdings 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.