Correlation Between EJF Investments and Lindsell Train
Can any of the company-specific risk be diversified away by investing in both EJF Investments 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 EJF Investments and Lindsell Train into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EJF Investments and Lindsell Train Investment, you can compare the effects of market volatilities on EJF Investments 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 EJF Investments with a short position of Lindsell Train. Check out your portfolio center. Please also check ongoing floating volatility patterns of EJF Investments and Lindsell Train.
Diversification Opportunities for EJF Investments and Lindsell Train
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between EJF and Lindsell is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding EJF Investments 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 EJF Investments 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 EJF Investments 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 EJF Investments i.e., EJF Investments and Lindsell Train go up and down completely randomly.
Pair Corralation between EJF Investments and Lindsell Train
Assuming the 90 days trading horizon EJF Investments is expected to generate 1.46 times less return on investment than Lindsell Train. But when comparing it to its historical volatility, EJF Investments is 1.58 times less risky than Lindsell Train. It trades about 0.22 of its potential returns per unit of risk. Lindsell Train Investment is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 74,700 in Lindsell Train Investment on October 13, 2024 and sell it today you would earn a total of 5,900 from holding Lindsell Train Investment or generate 7.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
EJF Investments vs. Lindsell Train Investment
Performance |
| Timeline |
| EJF Investments |
| Lindsell Train Investment |
EJF Investments and Lindsell Train Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EJF Investments and Lindsell Train
The main advantage of trading using opposite EJF Investments and Lindsell Train positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EJF Investments 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.| EJF Investments vs. Universal Music Group | EJF Investments vs. Liontrust Asset Management | EJF Investments vs. FC Investment Trust | EJF Investments vs. Monks Investment Trust |
| Lindsell Train vs. Cornish Metals | Lindsell Train vs. Discover Financial Services | Lindsell Train vs. UNIQA Insurance Group | Lindsell Train vs. Sparebank 1 SR |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |