Correlation Between SiteOne Landscape and Dividend

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

By analyzing existing cross correlation between SiteOne Landscape Supply and Dividend 15 Split, you can compare the effects of market volatilities on SiteOne Landscape and Dividend 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 SiteOne Landscape with a short position of Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of SiteOne Landscape and Dividend.

Diversification Opportunities for SiteOne Landscape and Dividend

-0.23

Correlation Coefficient

SiteOne Landscape  Dividend

Very good diversification

The 3 months correlation between SiteOne and Dividend is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding SiteOne Landscape Supply and Dividend 15 Split in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dividend 15 Split and SiteOne Landscape 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 SiteOne Landscape Supply are associated (or correlated) with Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dividend 15 Split has no effect on the direction of SiteOne Landscape i.e., SiteOne Landscape and Dividend go up and down completely randomly.

Pair Corralation between SiteOne Landscape and Dividend

Given the investment horizon of 90 days SiteOne Landscape Supply is expected to under-perform the Dividend. In addition to that, SiteOne Landscape is 3.23 times more volatile than Dividend 15 Split. It trades about -0.02 of its total potential returns per unit of risk. Dividend 15 Split is currently generating about 0.09 per unit of volatility. If you would invest  276.00  in Dividend 15 Split on October 4, 2024 and sell it today you would earn a total of  82.00  from holding Dividend 15 Split or generate 29.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.47%
Values	Daily Returns

SiteOne Landscape Supply  vs.  Dividend 15 Split

SiteOne Landscape Supply

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SiteOne Landscape Supply has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Dividend 15 Split

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dividend 15 Split are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Dividend may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with SiteOne Landscape and Dividend

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

The idea behind SiteOne Landscape Supply and Dividend 15 Split 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.