Correlation Between Foresight Group and Lindsell Train
Can any of the company-specific risk be diversified away by investing in both Foresight Group 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 Foresight Group and Lindsell Train into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Foresight Group Holdings and Lindsell Train Investment, you can compare the effects of market volatilities on Foresight Group 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 Foresight Group with a short position of Lindsell Train. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foresight Group and Lindsell Train.
Diversification Opportunities for Foresight Group and Lindsell Train
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Foresight and Lindsell is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Foresight Group Holdings 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 Foresight Group 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 Foresight Group Holdings 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 Foresight Group i.e., Foresight Group and Lindsell Train go up and down completely randomly.
Pair Corralation between Foresight Group and Lindsell Train
Assuming the 90 days trading horizon Foresight Group Holdings is expected to under-perform the Lindsell Train. In addition to that, Foresight Group is 1.65 times more volatile than Lindsell Train Investment. It trades about -0.18 of its total potential returns per unit of risk. Lindsell Train Investment is currently generating about 0.2 per unit of volatility. If you would invest 78,700 in Lindsell Train Investment on October 23, 2024 and sell it today you would earn a total of 3,600 from holding Lindsell Train Investment or generate 4.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Foresight Group Holdings vs. Lindsell Train Investment
Performance |
| Timeline |
| Foresight Group Holdings |
| Lindsell Train Investment |
Foresight Group and Lindsell Train Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Foresight Group and Lindsell Train
The main advantage of trading using opposite Foresight Group and Lindsell Train positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foresight Group 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.| Foresight Group vs. Lindsell Train Investment | Foresight Group vs. JD Sports Fashion | Foresight Group vs. Erste Group Bank | Foresight Group vs. CAP LEASE AVIATION |
| 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |