Correlation Between Cadogan Petroleum and Lendinvest PLC
Can any of the company-specific risk be diversified away by investing in both Cadogan Petroleum 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 Cadogan Petroleum and Lendinvest PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cadogan Petroleum plc and Lendinvest PLC, you can compare the effects of market volatilities on Cadogan Petroleum 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 Cadogan Petroleum with a short position of Lendinvest PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cadogan Petroleum and Lendinvest PLC.
Diversification Opportunities for Cadogan Petroleum and Lendinvest PLC
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cadogan and Lendinvest is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Cadogan Petroleum plc and Lendinvest PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendinvest PLC and Cadogan Petroleum 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 Cadogan Petroleum plc 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 Cadogan Petroleum i.e., Cadogan Petroleum and Lendinvest PLC go up and down completely randomly.
Pair Corralation between Cadogan Petroleum and Lendinvest PLC
Assuming the 90 days trading horizon Cadogan Petroleum plc is expected to generate about the same return on investment as Lendinvest PLC. But, Cadogan Petroleum plc is 2.51 times less risky than Lendinvest PLC. It trades about 0.21 of its potential returns per unit of risk. Lendinvest PLC is currently generating about 0.08 per unit of risk. If you would invest 2,600 in Lendinvest PLC on September 1, 2024 and sell it today you would earn a total of 50.00 from holding Lendinvest PLC or generate 1.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Cadogan Petroleum plc vs. Lendinvest PLC
Performance |
| Timeline |
| Cadogan Petroleum plc |
| Lendinvest PLC |
Cadogan Petroleum and Lendinvest PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cadogan Petroleum and Lendinvest PLC
The main advantage of trading using opposite Cadogan Petroleum and Lendinvest PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cadogan Petroleum 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.| Cadogan Petroleum vs. Zoom Video Communications | Cadogan Petroleum vs. Enbridge | Cadogan Petroleum vs. Endo International PLC | Cadogan Petroleum vs. Thyssenkrupp AG ON |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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