Correlation Between Lendinvest PLC and AMG Advanced
Can any of the company-specific risk be diversified away by investing in both Lendinvest PLC and AMG Advanced 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 AMG Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendinvest PLC and AMG Advanced Metallurgical, you can compare the effects of market volatilities on Lendinvest PLC and AMG Advanced 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 AMG Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendinvest PLC and AMG Advanced.
Diversification Opportunities for Lendinvest PLC and AMG Advanced
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lendinvest and AMG is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Lendinvest PLC and AMG Advanced Metallurgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMG Advanced Metallu 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 AMG Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMG Advanced Metallu has no effect on the direction of Lendinvest PLC i.e., Lendinvest PLC and AMG Advanced go up and down completely randomly.
Pair Corralation between Lendinvest PLC and AMG Advanced
Assuming the 90 days trading horizon Lendinvest PLC is expected to generate 0.56 times more return on investment than AMG Advanced. However, Lendinvest PLC is 1.79 times less risky than AMG Advanced. It trades about 0.08 of its potential returns per unit of risk. AMG Advanced Metallurgical is currently generating about -0.21 per unit of risk. If you would invest 2,600 in Lendinvest PLC on September 1, 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. AMG Advanced Metallurgical
Performance |
| Timeline |
| Lendinvest PLC |
| AMG Advanced Metallu |
Lendinvest PLC and AMG Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendinvest PLC and AMG Advanced
The main advantage of trading using opposite Lendinvest PLC and AMG Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendinvest PLC position performs unexpectedly, AMG Advanced 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 AMG Advanced will offset losses from the drop in AMG Advanced's long position.| Lendinvest PLC vs. Samsung Electronics Co | Lendinvest PLC vs. Samsung Electronics Co | Lendinvest PLC vs. Toyota Motor Corp | Lendinvest PLC vs. Reliance Industries Ltd |
| AMG Advanced vs. DXC Technology Co | AMG Advanced vs. Uber Technologies | AMG Advanced vs. Science in Sport | AMG Advanced vs. Finnair Oyj |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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