Correlation Between Southern Copper and Lindsell Train
Can any of the company-specific risk be diversified away by investing in both Southern Copper and Lindsell Train 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 Southern Copper and Lindsell Train into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern Copper Corp and Lindsell Train Investment, you can compare the effects of market volatilities on Southern Copper and Lindsell Train 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 Southern Copper with a short position of Lindsell Train. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Copper and Lindsell Train.
Diversification Opportunities for Southern Copper and Lindsell Train
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Southern and Lindsell is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Southern Copper Corp and Lindsell Train Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindsell Train Investment and Southern Copper 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 Southern Copper Corp are associated (or correlated) with Lindsell Train. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindsell Train Investment has no effect on the direction of Southern Copper i.e., Southern Copper and Lindsell Train go up and down completely randomly.
Pair Corralation between Southern Copper and Lindsell Train
Assuming the 90 days trading horizon Southern Copper Corp is expected to under-perform the Lindsell Train. In addition to that, Southern Copper is 1.25 times more volatile than Lindsell Train Investment. It trades about -0.22 of its total potential returns per unit of risk. Lindsell Train Investment is currently generating about 0.19 per unit of volatility. If you would invest 73,200 in Lindsell Train Investment on September 21, 2024 and sell it today you would earn a total of 5,400 from holding Lindsell Train Investment or generate 7.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southern Copper Corp vs. Lindsell Train Investment
Performance |
| Timeline |
| Southern Copper Corp |
| Lindsell Train Investment |
Southern Copper and Lindsell Train Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Copper and Lindsell Train
The main advantage of trading using opposite Southern Copper and Lindsell Train positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Copper position performs unexpectedly, Lindsell Train 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 Lindsell Train will offset losses from the drop in Lindsell Train's long position.| Southern Copper vs. PureTech Health plc | Southern Copper vs. MTI Wireless Edge | Southern Copper vs. Made Tech Group | Southern Copper vs. Concurrent Technologies Plc |
| Lindsell Train vs. Catalyst Media Group | Lindsell Train vs. CATLIN GROUP | Lindsell Train vs. Tamburi Investment Partners | Lindsell Train vs. Magnora ASA |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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