Correlation Between General American and Hargreaves Lansdown
Can any of the company-specific risk be diversified away by investing in both General American 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 General American and Hargreaves Lansdown into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General American Investors and Hargreaves Lansdown plc, you can compare the effects of market volatilities on General American 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 General American with a short position of Hargreaves Lansdown. Check out your portfolio center. Please also check ongoing floating volatility patterns of General American and Hargreaves Lansdown.
Diversification Opportunities for General American and Hargreaves Lansdown
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between General and Hargreaves is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding General American Investors 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 General American 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 General American Investors 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 General American i.e., General American and Hargreaves Lansdown go up and down completely randomly.
Pair Corralation between General American and Hargreaves Lansdown
Considering the 90-day investment horizon General American is expected to generate 1.8 times less return on investment than Hargreaves Lansdown. But when comparing it to its historical volatility, General American Investors is 3.56 times less risky than Hargreaves Lansdown. It trades about 0.08 of its potential returns per unit of risk. Hargreaves Lansdown plc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 966.00 in Hargreaves Lansdown plc on September 3, 2024 and sell it today you would earn a total of 399.00 from holding Hargreaves Lansdown plc or generate 41.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 85.45% |
| Values | Daily Returns |
General American Investors vs. Hargreaves Lansdown plc
Performance |
| Timeline |
| General American Inv |
| Hargreaves Lansdown plc |
General American and Hargreaves Lansdown Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General American and Hargreaves Lansdown
The main advantage of trading using opposite General American and Hargreaves Lansdown positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General American 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.| General American vs. Blackrock Muniyield | General American vs. Allianzgi Equity Convertible | General American vs. MFS Investment Grade | General American vs. Eaton Vance National |
| Hargreaves Lansdown vs. Blackrock International Growth | Hargreaves Lansdown vs. Blackrock Enhanced Equity | Hargreaves Lansdown vs. Eaton Vance Tax | Hargreaves Lansdown vs. Blackrock Resources Commodities |
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
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| CEOs Directory Screen CEOs from public companies around the world | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |