Correlation Between Lendinvest PLC and Retail Estates
Can any of the company-specific risk be diversified away by investing in both Lendinvest PLC and Retail Estates 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 Lendinvest PLC and Retail Estates into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendinvest PLC and Retail Estates NV, you can compare the effects of market volatilities on Lendinvest PLC and Retail Estates 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 Lendinvest PLC with a short position of Retail Estates. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendinvest PLC and Retail Estates.
Diversification Opportunities for Lendinvest PLC and Retail Estates
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lendinvest and Retail is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Lendinvest PLC and Retail Estates NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retail Estates NV and Lendinvest PLC 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 Lendinvest PLC are associated (or correlated) with Retail Estates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retail Estates NV has no effect on the direction of Lendinvest PLC i.e., Lendinvest PLC and Retail Estates go up and down completely randomly.
Pair Corralation between Lendinvest PLC and Retail Estates
Assuming the 90 days trading horizon Lendinvest PLC is expected to generate 9.89 times less return on investment than Retail Estates. But when comparing it to its historical volatility, Lendinvest PLC is 7.68 times less risky than Retail Estates. It trades about 0.08 of its potential returns per unit of risk. Retail Estates NV is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 6,360 in Retail Estates NV on August 29, 2024 and sell it today you would earn a total of 850.00 from holding Retail Estates NV or generate 13.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lendinvest PLC vs. Retail Estates NV
Performance |
| Timeline |
| Lendinvest PLC |
| Retail Estates NV |
Lendinvest PLC and Retail Estates Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendinvest PLC and Retail Estates
The main advantage of trading using opposite Lendinvest PLC and Retail Estates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendinvest PLC position performs unexpectedly, Retail Estates 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 Retail Estates will offset losses from the drop in Retail Estates' long position.| Lendinvest PLC vs. Toyota Motor Corp | Lendinvest PLC vs. Neometals | Lendinvest PLC vs. Coor Service Management | Lendinvest PLC vs. Albion Technology General |
| Retail Estates vs. Lendinvest PLC | Retail Estates vs. Neometals | Retail Estates vs. Coor Service Management | Retail Estates vs. Albion Technology General |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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