Correlation Between Winmark and La Z

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

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

Diversification Opportunities for Winmark and La Z

-0.08

Correlation Coefficient

Winmark  La Z

Good diversification

The 3 months correlation between Winmark and LZB is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Winmark and La Z Boy Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on La Z Boy and Winmark 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 Winmark are associated (or correlated) with La Z. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of La Z Boy has no effect on the direction of Winmark i.e., Winmark and La Z go up and down completely randomly.

Pair Corralation between Winmark and La Z

Given the investment horizon of 90 days Winmark is expected to under-perform the La Z. But the stock apears to be less risky and, when comparing its historical volatility, Winmark is 1.26 times less risky than La Z. The stock trades about -0.07 of its potential returns per unit of risk. The La Z Boy Incorporated is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  3,280  in La Z Boy Incorporated on October 8, 2025 and sell it today you would earn a total of  492.00  from holding La Z Boy Incorporated or generate 15.0% return on investment over 90 days.

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

Winmark  vs.  La Z Boy Incorporated

Winmark

Risk-Adjusted Performance

Weakest

Over the last 90 days Winmark has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

La Z Boy

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in La Z Boy Incorporated are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, La Z sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Winmark and La Z

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

The idea behind Winmark and La Z Boy Incorporated 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.