Correlation Between Lendinvest PLC and Fortune Brands
Can any of the company-specific risk be diversified away by investing in both Lendinvest PLC and Fortune Brands 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 Fortune Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendinvest PLC and Fortune Brands Home, you can compare the effects of market volatilities on Lendinvest PLC and Fortune Brands 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 Fortune Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendinvest PLC and Fortune Brands.
Diversification Opportunities for Lendinvest PLC and Fortune Brands
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lendinvest and Fortune is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Lendinvest PLC and Fortune Brands Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortune Brands Home 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 Fortune Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortune Brands Home has no effect on the direction of Lendinvest PLC i.e., Lendinvest PLC and Fortune Brands go up and down completely randomly.
Pair Corralation between Lendinvest PLC and Fortune Brands
Assuming the 90 days trading horizon Lendinvest PLC is expected to under-perform the Fortune Brands. In addition to that, Lendinvest PLC is 1.24 times more volatile than Fortune Brands Home. It trades about -0.06 of its total potential returns per unit of risk. Fortune Brands Home is currently generating about 0.06 per unit of volatility. If you would invest 5,125 in Fortune Brands Home on August 30, 2024 and sell it today you would earn a total of 2,704 from holding Fortune Brands Home or generate 52.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 76.32% |
| Values | Daily Returns |
Lendinvest PLC vs. Fortune Brands Home
Performance |
| Timeline |
| Lendinvest PLC |
| Fortune Brands Home |
Lendinvest PLC and Fortune Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendinvest PLC and Fortune Brands
The main advantage of trading using opposite Lendinvest PLC and Fortune Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendinvest PLC position performs unexpectedly, Fortune Brands 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 Fortune Brands will offset losses from the drop in Fortune Brands' long position.| Lendinvest PLC vs. Toyota Motor Corp | Lendinvest PLC vs. Neometals | Lendinvest PLC vs. Coor Service Management | Lendinvest PLC vs. Albion Technology General |
| Fortune Brands vs. Lendinvest PLC | Fortune Brands vs. Neometals | Fortune Brands vs. Albion Technology General | Fortune Brands vs. Jupiter Fund Management |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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