Correlation Between Retail Estates and Lendinvest PLC
Can any of the company-specific risk be diversified away by investing in both Retail Estates and Lendinvest PLC 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 Retail Estates and Lendinvest PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Retail Estates NV and Lendinvest PLC, you can compare the effects of market volatilities on Retail Estates and Lendinvest PLC 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 Retail Estates with a short position of Lendinvest PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Estates and Lendinvest PLC.
Diversification Opportunities for Retail Estates and Lendinvest PLC
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Retail and Lendinvest is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Retail Estates NV and Lendinvest PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendinvest PLC and Retail Estates 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 Retail Estates NV are associated (or correlated) with Lendinvest PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendinvest PLC has no effect on the direction of Retail Estates i.e., Retail Estates and Lendinvest PLC go up and down completely randomly.
Pair Corralation between Retail Estates and Lendinvest PLC
Assuming the 90 days trading horizon Retail Estates NV is expected to generate 1.1 times more return on investment than Lendinvest PLC. However, Retail Estates is 1.1 times more volatile than Lendinvest PLC. It trades about 0.03 of its potential returns per unit of risk. Lendinvest PLC is currently generating about -0.06 per unit of risk. If you would invest 5,460 in Retail Estates NV on August 27, 2024 and sell it today you would earn a total of 1,750 from holding Retail Estates NV or generate 32.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Retail Estates NV vs. Lendinvest PLC
Performance |
| Timeline |
| Retail Estates NV |
| Lendinvest PLC |
Retail Estates and Lendinvest PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Estates and Lendinvest PLC
The main advantage of trading using opposite Retail Estates and Lendinvest PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Estates position performs unexpectedly, Lendinvest PLC 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 Lendinvest PLC will offset losses from the drop in Lendinvest PLC's long position.| Retail Estates vs. Samsung Electronics Co | Retail Estates vs. Samsung Electronics Co | Retail Estates vs. Hyundai Motor | Retail Estates vs. Toyota Motor Corp |
| Lendinvest PLC vs. Coor Service Management | Lendinvest PLC vs. Tata Steel Limited | Lendinvest PLC vs. Retail Estates NV | Lendinvest PLC vs. Ross Stores |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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