Correlation Between Lakeland Industries and Oxford Industries

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

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

Diversification Opportunities for Lakeland Industries and Oxford Industries

0.81

Correlation Coefficient

Lakeland Industries  Oxford Industries

Very poor diversification

The 3 months correlation between Lakeland and Oxford is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Lakeland Industries and Oxford Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxford Industries and Lakeland Industries 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 Lakeland Industries are associated (or correlated) with Oxford Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxford Industries has no effect on the direction of Lakeland Industries i.e., Lakeland Industries and Oxford Industries go up and down completely randomly.

Pair Corralation between Lakeland Industries and Oxford Industries

Given the investment horizon of 90 days Lakeland Industries is expected to generate 1.15 times more return on investment than Oxford Industries. However, Lakeland Industries is 1.15 times more volatile than Oxford Industries. It trades about -0.1 of its potential returns per unit of risk. Oxford Industries is currently generating about -0.13 per unit of risk. If you would invest  2,547  in Lakeland Industries on December 29, 2024 and sell it today you would lose (521.00) from holding Lakeland Industries or give up 20.46% of portfolio value over 90 days.

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

Lakeland Industries  vs.  Oxford Industries

Lakeland Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lakeland Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's forward-looking signals 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.

Oxford Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oxford Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Lakeland Industries and Oxford Industries

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

The idea behind Lakeland Industries and Oxford Industries 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.