Correlation Between Hargreaves Lansdown and Standard Life
Can any of the company-specific risk be diversified away by investing in both Hargreaves Lansdown and Standard Life 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 Standard Life 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 Standard Life Aberdeen, you can compare the effects of market volatilities on Hargreaves Lansdown and Standard Life 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 Standard Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hargreaves Lansdown and Standard Life.
Diversification Opportunities for Hargreaves Lansdown and Standard Life
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hargreaves and Standard is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Hargreaves Lansdown plc and Standard Life Aberdeen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standard Life Aberdeen 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 Standard Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standard Life Aberdeen has no effect on the direction of Hargreaves Lansdown i.e., Hargreaves Lansdown and Standard Life go up and down completely randomly.
Pair Corralation between Hargreaves Lansdown and Standard Life
Assuming the 90 days horizon Hargreaves Lansdown plc is expected to generate 1.42 times more return on investment than Standard Life. However, Hargreaves Lansdown is 1.42 times more volatile than Standard Life Aberdeen. It trades about 0.09 of its potential returns per unit of risk. Standard Life Aberdeen is currently generating about 0.0 per unit of risk. If you would invest 892.00 in Hargreaves Lansdown plc on September 3, 2024 and sell it today you would earn a total of 473.00 from holding Hargreaves Lansdown plc or generate 53.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.59% |
| Values | Daily Returns |
Hargreaves Lansdown plc vs. Standard Life Aberdeen
Performance |
| Timeline |
| Hargreaves Lansdown plc |
| Standard Life Aberdeen |
Hargreaves Lansdown and Standard Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hargreaves Lansdown and Standard Life
The main advantage of trading using opposite Hargreaves Lansdown and Standard Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hargreaves Lansdown position performs unexpectedly, Standard Life 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 Standard Life will offset losses from the drop in Standard Life's long position.| Hargreaves Lansdown vs. Blackrock International Growth | Hargreaves Lansdown vs. Blackrock Enhanced Equity | Hargreaves Lansdown vs. Eaton Vance Tax | Hargreaves Lansdown vs. Blackrock Resources Commodities |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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