Correlation Between Poxel SA and Lindsell Train
Can any of the company-specific risk be diversified away by investing in both Poxel SA 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 Poxel SA and Lindsell Train into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Poxel SA and Lindsell Train Investment, you can compare the effects of market volatilities on Poxel SA 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 Poxel SA with a short position of Lindsell Train. Check out your portfolio center. Please also check ongoing floating volatility patterns of Poxel SA and Lindsell Train.
Diversification Opportunities for Poxel SA and Lindsell Train
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Poxel and Lindsell is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Poxel SA 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 Poxel SA 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 Poxel SA 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 Poxel SA i.e., Poxel SA and Lindsell Train go up and down completely randomly.
Pair Corralation between Poxel SA and Lindsell Train
Assuming the 90 days trading horizon Poxel SA is expected to under-perform the Lindsell Train. In addition to that, Poxel SA is 3.93 times more volatile than Lindsell Train Investment. It trades about -0.05 of its total potential returns per unit of risk. Lindsell Train Investment is currently generating about -0.05 per unit of volatility. If you would invest 100,689 in Lindsell Train Investment on September 12, 2024 and sell it today you would lose (25,889) from holding Lindsell Train Investment or give up 25.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
Poxel SA vs. Lindsell Train Investment
Performance |
| Timeline |
| Poxel SA |
| Lindsell Train Investment |
Poxel SA and Lindsell Train Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Poxel SA and Lindsell Train
The main advantage of trading using opposite Poxel SA and Lindsell Train positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Poxel SA 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.| Poxel SA vs. Lindsell Train Investment | Poxel SA vs. Systemair AB | Poxel SA vs. Air Products Chemicals | Poxel SA vs. Gaztransport et Technigaz |
| Lindsell Train vs. Samsung Electronics Co | Lindsell Train vs. Samsung Electronics Co | Lindsell Train vs. Hyundai Motor | Lindsell Train vs. Toyota Motor Corp |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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