Correlation Between Investment and Lendinvest PLC
Can any of the company-specific risk be diversified away by investing in both Investment 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 Investment and Lendinvest PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Investment and Lendinvest PLC, you can compare the effects of market volatilities on Investment 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 Investment with a short position of Lendinvest PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investment and Lendinvest PLC.
Diversification Opportunities for Investment and Lendinvest PLC
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Investment and Lendinvest is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding The Investment and Lendinvest PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendinvest PLC and Investment 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 The Investment 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 Investment i.e., Investment and Lendinvest PLC go up and down completely randomly.
Pair Corralation between Investment and Lendinvest PLC
Assuming the 90 days trading horizon The Investment is expected to generate 0.48 times more return on investment than Lendinvest PLC. However, The Investment is 2.1 times less risky than Lendinvest PLC. It trades about 0.08 of its potential returns per unit of risk. Lendinvest PLC is currently generating about -0.04 per unit of risk. If you would invest 35,500 in The Investment on September 1, 2024 and sell it today you would earn a total of 2,100 from holding The Investment or generate 5.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Investment vs. Lendinvest PLC
Performance |
| Timeline |
| Investment |
| Lendinvest PLC |
Investment and Lendinvest PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investment and Lendinvest PLC
The main advantage of trading using opposite Investment and Lendinvest PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investment 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.| Investment vs. Automatic Data Processing | Investment vs. Pentair PLC | Investment vs. Cairn Homes PLC | Investment vs. Ryanair Holdings plc |
| Lendinvest PLC vs. Samsung Electronics Co | Lendinvest PLC vs. Samsung Electronics Co | Lendinvest PLC vs. Toyota Motor Corp | Lendinvest PLC vs. Reliance Industries Ltd |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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