Correlation Between AJ Bell and Hargreaves Lansdown
Can any of the company-specific risk be diversified away by investing in both AJ Bell and Hargreaves Lansdown 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 AJ Bell and Hargreaves Lansdown into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AJ Bell plc and Hargreaves Lansdown plc, you can compare the effects of market volatilities on AJ Bell and Hargreaves Lansdown 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 AJ Bell with a short position of Hargreaves Lansdown. Check out your portfolio center. Please also check ongoing floating volatility patterns of AJ Bell and Hargreaves Lansdown.
Diversification Opportunities for AJ Bell and Hargreaves Lansdown
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AJB and Hargreaves is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding AJ Bell plc and Hargreaves Lansdown plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hargreaves Lansdown plc and AJ Bell 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 AJ Bell plc are associated (or correlated) with Hargreaves Lansdown. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hargreaves Lansdown plc has no effect on the direction of AJ Bell i.e., AJ Bell and Hargreaves Lansdown go up and down completely randomly.
Pair Corralation between AJ Bell and Hargreaves Lansdown
Assuming the 90 days trading horizon AJ Bell plc is expected to generate 10.45 times more return on investment than Hargreaves Lansdown. However, AJ Bell is 10.45 times more volatile than Hargreaves Lansdown plc. It trades about 0.1 of its potential returns per unit of risk. Hargreaves Lansdown plc is currently generating about 0.23 per unit of risk. If you would invest 46,100 in AJ Bell plc on August 31, 2024 and sell it today you would earn a total of 1,200 from holding AJ Bell plc or generate 2.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
AJ Bell plc vs. Hargreaves Lansdown plc
Performance |
| Timeline |
| AJ Bell plc |
| Hargreaves Lansdown plc |
AJ Bell and Hargreaves Lansdown Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AJ Bell and Hargreaves Lansdown
The main advantage of trading using opposite AJ Bell and Hargreaves Lansdown positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AJ Bell position performs unexpectedly, Hargreaves Lansdown 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 Hargreaves Lansdown will offset losses from the drop in Hargreaves Lansdown's long position.| AJ Bell vs. Premier Foods PLC | AJ Bell vs. Sligro Food Group | AJ Bell vs. Pfeiffer Vacuum Technology | AJ Bell vs. Spotify Technology SA |
| Hargreaves Lansdown vs. Mindflair Plc | Hargreaves Lansdown vs. GoldMining | Hargreaves Lansdown vs. Metals Exploration Plc | Hargreaves Lansdown vs. Blackrock World Mining |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |