Correlation Between Axon Enterprise and Lendinvest PLC
Can any of the company-specific risk be diversified away by investing in both Axon Enterprise 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 Axon Enterprise and Lendinvest PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axon Enterprise and Lendinvest PLC, you can compare the effects of market volatilities on Axon Enterprise 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 Axon Enterprise with a short position of Lendinvest PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axon Enterprise and Lendinvest PLC.
Diversification Opportunities for Axon Enterprise and Lendinvest PLC
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Axon and Lendinvest is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Axon Enterprise and Lendinvest PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendinvest PLC and Axon Enterprise 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 Axon Enterprise 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 Axon Enterprise i.e., Axon Enterprise and Lendinvest PLC go up and down completely randomly.
Pair Corralation between Axon Enterprise and Lendinvest PLC
Assuming the 90 days trading horizon Axon Enterprise is expected to generate 2.66 times more return on investment than Lendinvest PLC. However, Axon Enterprise is 2.66 times more volatile than Lendinvest PLC. It trades about 0.21 of its potential returns per unit of risk. Lendinvest PLC is currently generating about -0.04 per unit of risk. If you would invest 27,672 in Axon Enterprise on September 1, 2024 and sell it today you would earn a total of 37,080 from holding Axon Enterprise or generate 134.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.47% |
| Values | Daily Returns |
Axon Enterprise vs. Lendinvest PLC
Performance |
| Timeline |
| Axon Enterprise |
| Lendinvest PLC |
Axon Enterprise and Lendinvest PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axon Enterprise and Lendinvest PLC
The main advantage of trading using opposite Axon Enterprise and Lendinvest PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axon Enterprise 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.| Axon Enterprise vs. Uniper SE | Axon Enterprise vs. Mulberry Group PLC | Axon Enterprise vs. London Security Plc | Axon Enterprise vs. Triad Group PLC |
| Lendinvest PLC vs. Samsung Electronics Co | Lendinvest PLC vs. Samsung Electronics Co | Lendinvest PLC vs. Toyota Motor Corp | Lendinvest PLC vs. Reliance Industries Ltd |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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