Correlation Between Tradeweb Markets and LOWES

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

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

Diversification Opportunities for Tradeweb Markets and LOWES

-0.56

Correlation Coefficient

Tradeweb Markets  LOWES

Excellent diversification

The 3 months correlation between Tradeweb and LOWES is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Tradeweb Markets and LOWES PANIES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOWES PANIES INC and Tradeweb Markets 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 Tradeweb Markets are associated (or correlated) with LOWES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOWES PANIES INC has no effect on the direction of Tradeweb Markets i.e., Tradeweb Markets and LOWES go up and down completely randomly.

Pair Corralation between Tradeweb Markets and LOWES

Allowing for the 90-day total investment horizon Tradeweb Markets is expected to generate 1.75 times more return on investment than LOWES. However, Tradeweb Markets is 1.75 times more volatile than LOWES PANIES INC. It trades about 0.07 of its potential returns per unit of risk. LOWES PANIES INC is currently generating about 0.08 per unit of risk. If you would invest  13,418  in Tradeweb Markets on December 24, 2024 and sell it today you would earn a total of  823.00  from holding Tradeweb Markets or generate 6.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Tradeweb Markets  vs.  LOWES PANIES INC

Tradeweb Markets

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tradeweb Markets are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Tradeweb Markets may actually be approaching a critical reversion point that can send shares even higher in April 2025.

LOWES PANIES INC

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in LOWES PANIES INC are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, LOWES is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Tradeweb Markets and LOWES

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

The idea behind Tradeweb Markets and LOWES PANIES INC 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..