Correlation Between Lendinvest PLC and Veolia Environnement
Can any of the company-specific risk be diversified away by investing in both Lendinvest PLC and Veolia Environnement 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 Veolia Environnement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendinvest PLC and Veolia Environnement VE, you can compare the effects of market volatilities on Lendinvest PLC and Veolia Environnement 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 Veolia Environnement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendinvest PLC and Veolia Environnement.
Diversification Opportunities for Lendinvest PLC and Veolia Environnement
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lendinvest and Veolia is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Lendinvest PLC and Veolia Environnement VE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veolia Environnement 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 Veolia Environnement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veolia Environnement has no effect on the direction of Lendinvest PLC i.e., Lendinvest PLC and Veolia Environnement go up and down completely randomly.
Pair Corralation between Lendinvest PLC and Veolia Environnement
Assuming the 90 days trading horizon Lendinvest PLC is expected to under-perform the Veolia Environnement. In addition to that, Lendinvest PLC is 2.38 times more volatile than Veolia Environnement VE. It trades about -0.08 of its total potential returns per unit of risk. Veolia Environnement VE is currently generating about 0.02 per unit of volatility. If you would invest 2,549 in Veolia Environnement VE on September 1, 2024 and sell it today you would earn a total of 208.00 from holding Veolia Environnement VE or generate 8.16% 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. Veolia Environnement VE
Performance |
| Timeline |
| Lendinvest PLC |
| Veolia Environnement |
Lendinvest PLC and Veolia Environnement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendinvest PLC and Veolia Environnement
The main advantage of trading using opposite Lendinvest PLC and Veolia Environnement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendinvest PLC position performs unexpectedly, Veolia Environnement 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 Veolia Environnement will offset losses from the drop in Veolia Environnement'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 |
| Veolia Environnement vs. Uniper SE | Veolia Environnement vs. Mulberry Group PLC | Veolia Environnement vs. London Security Plc | Veolia Environnement vs. Triad Group PLC |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |