Correlation Between Hargreaves Lansdown and Lendinvest PLC
Can any of the company-specific risk be diversified away by investing in both Hargreaves Lansdown 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 Hargreaves Lansdown and Lendinvest PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hargreaves Lansdown plc and Lendinvest PLC, you can compare the effects of market volatilities on Hargreaves Lansdown 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 Hargreaves Lansdown with a short position of Lendinvest PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hargreaves Lansdown and Lendinvest PLC.
Diversification Opportunities for Hargreaves Lansdown and Lendinvest PLC
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hargreaves and Lendinvest is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Hargreaves Lansdown plc and Lendinvest PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendinvest PLC and Hargreaves Lansdown 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 Hargreaves Lansdown 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 Hargreaves Lansdown i.e., Hargreaves Lansdown and Lendinvest PLC go up and down completely randomly.
Pair Corralation between Hargreaves Lansdown and Lendinvest PLC
Assuming the 90 days trading horizon Hargreaves Lansdown plc is expected to generate 1.06 times more return on investment than Lendinvest PLC. However, Hargreaves Lansdown is 1.06 times more volatile than Lendinvest PLC. It trades about 0.11 of its potential returns per unit of risk. Lendinvest PLC is currently generating about -0.02 per unit of risk. If you would invest 71,549 in Hargreaves Lansdown plc on September 3, 2024 and sell it today you would earn a total of 37,701 from holding Hargreaves Lansdown plc or generate 52.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hargreaves Lansdown plc vs. Lendinvest PLC
Performance |
| Timeline |
| Hargreaves Lansdown plc |
| Lendinvest PLC |
Hargreaves Lansdown and Lendinvest PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hargreaves Lansdown and Lendinvest PLC
The main advantage of trading using opposite Hargreaves Lansdown and Lendinvest PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hargreaves Lansdown 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.| Hargreaves Lansdown vs. Auction Technology Group | Hargreaves Lansdown vs. JB Hunt Transport | Hargreaves Lansdown vs. Alfa Financial Software | Hargreaves Lansdown vs. Broadridge Financial Solutions |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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