Correlation Between Legal General and HANetf ICAV
Can any of the company-specific risk be diversified away by investing in both Legal General and HANetf ICAV 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 Legal General and HANetf ICAV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Legal General UCITS and HANetf ICAV , you can compare the effects of market volatilities on Legal General and HANetf ICAV 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 Legal General with a short position of HANetf ICAV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legal General and HANetf ICAV.
Diversification Opportunities for Legal General and HANetf ICAV
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Legal and HANetf is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Legal General UCITS and HANetf ICAV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANetf ICAV and Legal General 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 Legal General UCITS are associated (or correlated) with HANetf ICAV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HANetf ICAV has no effect on the direction of Legal General i.e., Legal General and HANetf ICAV go up and down completely randomly.
Pair Corralation between Legal General and HANetf ICAV
Assuming the 90 days trading horizon Legal General UCITS is expected to generate 0.9 times more return on investment than HANetf ICAV. However, Legal General UCITS is 1.12 times less risky than HANetf ICAV. It trades about 0.12 of its potential returns per unit of risk. HANetf ICAV is currently generating about -0.08 per unit of risk. If you would invest 2,219 in Legal General UCITS on October 26, 2024 and sell it today you would earn a total of 108.00 from holding Legal General UCITS or generate 4.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legal General UCITS vs. HANetf ICAV
Performance |
| Timeline |
| Legal General UCITS |
| HANetf ICAV |
Legal General and HANetf ICAV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legal General and HANetf ICAV
The main advantage of trading using opposite Legal General and HANetf ICAV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legal General position performs unexpectedly, HANetf ICAV 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 HANetf ICAV will offset losses from the drop in HANetf ICAV's long position.| Legal General vs. UBS Fund Solutions | Legal General vs. Xtrackers II | Legal General vs. Xtrackers Nikkei 225 | Legal General vs. iShares VII PLC |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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