Correlation Between Lendinvest PLC and Addtech
Can any of the company-specific risk be diversified away by investing in both Lendinvest PLC and Addtech 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 Addtech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendinvest PLC and Addtech, you can compare the effects of market volatilities on Lendinvest PLC and Addtech 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 Addtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendinvest PLC and Addtech.
Diversification Opportunities for Lendinvest PLC and Addtech
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lendinvest and Addtech is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Lendinvest PLC and Addtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addtech 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 Addtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addtech has no effect on the direction of Lendinvest PLC i.e., Lendinvest PLC and Addtech go up and down completely randomly.
Pair Corralation between Lendinvest PLC and Addtech
Assuming the 90 days trading horizon Lendinvest PLC is expected to generate 1.14 times less return on investment than Addtech. But when comparing it to its historical volatility, Lendinvest PLC is 1.51 times less risky than Addtech. It trades about 0.08 of its potential returns per unit of risk. Addtech is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 29,490 in Addtech on September 1, 2024 and sell it today you would earn a total of 630.00 from holding Addtech or generate 2.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lendinvest PLC vs. Addtech
Performance |
| Timeline |
| Lendinvest PLC |
| Addtech |
Lendinvest PLC and Addtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendinvest PLC and Addtech
The main advantage of trading using opposite Lendinvest PLC and Addtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendinvest PLC position performs unexpectedly, Addtech 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 Addtech will offset losses from the drop in Addtech'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 |
| Addtech vs. Bellevue Healthcare Trust | Addtech vs. Lendinvest PLC | Addtech vs. Omega Healthcare Investors | Addtech vs. CVS Health Corp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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