Correlation Between Lands End and ThredUp
Can any of the company-specific risk be diversified away by investing in both Lands End and ThredUp 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 Lands End and ThredUp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lands End and ThredUp, you can compare the effects of market volatilities on Lands End and ThredUp 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 Lands End with a short position of ThredUp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lands End and ThredUp.
Diversification Opportunities for Lands End and ThredUp
Very good diversification
The 3 months correlation between Lands and ThredUp is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Lands End and ThredUp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ThredUp and Lands End 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 Lands End are associated (or correlated) with ThredUp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ThredUp has no effect on the direction of Lands End i.e., Lands End and ThredUp go up and down completely randomly.
Pair Corralation between Lands End and ThredUp
Allowing for the 90-day total investment horizon Lands End is expected to under-perform the ThredUp. But the stock apears to be less risky and, when comparing its historical volatility, Lands End is 2.76 times less risky than ThredUp. The stock trades about -0.08 of its potential returns per unit of risk. The ThredUp is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 138.00 in ThredUp on December 18, 2024 and sell it today you would earn a total of 99.00 from holding ThredUp or generate 71.74% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Lands End vs. ThredUp
Performance |
Timeline |
Lands End |
ThredUp |
Lands End and ThredUp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lands End and ThredUp
The main advantage of trading using opposite Lands End and ThredUp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lands End position performs unexpectedly, ThredUp 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 ThredUp will offset losses from the drop in ThredUp's long position.Lands End vs. Tillys Inc | Lands End vs. Zumiez Inc | Lands End vs. Citi Trends | Lands End vs. Cato Corporation |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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