Correlation Between Lendinvest PLC and Industrivarden
Can any of the company-specific risk be diversified away by investing in both Lendinvest PLC and Industrivarden 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 Industrivarden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendinvest PLC and Industrivarden AB ser, you can compare the effects of market volatilities on Lendinvest PLC and Industrivarden 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 Industrivarden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendinvest PLC and Industrivarden.
Diversification Opportunities for Lendinvest PLC and Industrivarden
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lendinvest and Industrivarden is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Lendinvest PLC and Industrivarden AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrivarden AB ser 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 Industrivarden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrivarden AB ser has no effect on the direction of Lendinvest PLC i.e., Lendinvest PLC and Industrivarden go up and down completely randomly.
Pair Corralation between Lendinvest PLC and Industrivarden
Assuming the 90 days trading horizon Lendinvest PLC is expected to generate 1.05 times more return on investment than Industrivarden. However, Lendinvest PLC is 1.05 times more volatile than Industrivarden AB ser. It trades about 0.08 of its potential returns per unit of risk. Industrivarden AB ser is currently generating about -0.2 per unit of risk. If you would invest 2,600 in Lendinvest PLC on August 29, 2024 and sell it today you would earn a total of 50.00 from holding Lendinvest PLC or generate 1.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lendinvest PLC vs. Industrivarden AB ser
Performance |
| Timeline |
| Lendinvest PLC |
| Industrivarden AB ser |
Lendinvest PLC and Industrivarden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendinvest PLC and Industrivarden
The main advantage of trading using opposite Lendinvest PLC and Industrivarden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendinvest PLC position performs unexpectedly, Industrivarden 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 Industrivarden will offset losses from the drop in Industrivarden's long position.| Lendinvest PLC vs. Toyota Motor Corp | Lendinvest PLC vs. Neometals | Lendinvest PLC vs. Coor Service Management | Lendinvest PLC vs. Albion Technology General |
| Industrivarden vs. Lendinvest PLC | Industrivarden vs. Neometals | Industrivarden vs. Coor Service Management | Industrivarden 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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