Correlation Between Lennox International and Snap On
Can any of the company-specific risk be diversified away by investing in both Lennox International and Snap On 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 Lennox International and Snap On into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lennox International and Snap On, you can compare the effects of market volatilities on Lennox International and Snap On 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 Lennox International with a short position of Snap On. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lennox International and Snap On.
Diversification Opportunities for Lennox International and Snap On
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lennox and Snap is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Lennox International and Snap On in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Snap On and Lennox International 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 Lennox International are associated (or correlated) with Snap On. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Snap On has no effect on the direction of Lennox International i.e., Lennox International and Snap On go up and down completely randomly.
Pair Corralation between Lennox International and Snap On
Considering the 90-day investment horizon Lennox International is expected to under-perform the Snap On. In addition to that, Lennox International is 1.8 times more volatile than Snap On. It trades about -0.06 of its total potential returns per unit of risk. Snap On is currently generating about 0.09 per unit of volatility. If you would invest 31,948 in Snap On on September 3, 2025 and sell it today you would earn a total of 2,057 from holding Snap On or generate 6.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lennox International vs. Snap On
Performance |
| Timeline |
| Lennox International |
| Snap On |
Lennox International and Snap On Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lennox International and Snap On
The main advantage of trading using opposite Lennox International and Snap On positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lennox International position performs unexpectedly, Snap On 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 Snap On will offset losses from the drop in Snap On's long position.| Lennox International vs. LGI Homes | Lennox International vs. Rayonier Advanced Materials | Lennox International vs. Morgan Advanced Materials | Lennox International vs. HomeTrust Bancshares, |
| Snap On vs. GMO Internet | Snap On vs. Gamma Communications plc | Snap On vs. Sun Country Airlines | Snap On vs. Freedom Internet Group |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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