Correlation Between Lendinvest PLC and Enbridge
Can any of the company-specific risk be diversified away by investing in both Lendinvest PLC and Enbridge 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 Enbridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendinvest PLC and Enbridge, you can compare the effects of market volatilities on Lendinvest PLC and Enbridge 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 Enbridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendinvest PLC and Enbridge.
Diversification Opportunities for Lendinvest PLC and Enbridge
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lendinvest and Enbridge is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Lendinvest PLC and Enbridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge 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 Enbridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enbridge has no effect on the direction of Lendinvest PLC i.e., Lendinvest PLC and Enbridge go up and down completely randomly.
Pair Corralation between Lendinvest PLC and Enbridge
Assuming the 90 days trading horizon Lendinvest PLC is expected to under-perform the Enbridge. In addition to that, Lendinvest PLC is 2.03 times more volatile than Enbridge. It trades about -0.06 of its total potential returns per unit of risk. Enbridge is currently generating about 0.08 per unit of volatility. If you would invest 4,619 in Enbridge on August 29, 2024 and sell it today you would earn a total of 1,359 from holding Enbridge or generate 29.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 54.95% |
| Values | Daily Returns |
Lendinvest PLC vs. Enbridge
Performance |
| Timeline |
| Lendinvest PLC |
| Enbridge |
Lendinvest PLC and Enbridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendinvest PLC and Enbridge
The main advantage of trading using opposite Lendinvest PLC and Enbridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendinvest PLC position performs unexpectedly, Enbridge 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 Enbridge will offset losses from the drop in Enbridge'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 |
| Enbridge vs. Lendinvest PLC | Enbridge vs. Neometals | Enbridge vs. Coor Service Management | Enbridge 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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