Correlation Between Lendinvest PLC and BH Macro
Can any of the company-specific risk be diversified away by investing in both Lendinvest PLC and BH Macro 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 BH Macro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendinvest PLC and BH Macro Limited, you can compare the effects of market volatilities on Lendinvest PLC and BH Macro 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 BH Macro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendinvest PLC and BH Macro.
Diversification Opportunities for Lendinvest PLC and BH Macro
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lendinvest and BHMU is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Lendinvest PLC and BH Macro Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BH Macro Limited 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 BH Macro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BH Macro Limited has no effect on the direction of Lendinvest PLC i.e., Lendinvest PLC and BH Macro go up and down completely randomly.
Pair Corralation between Lendinvest PLC and BH Macro
Assuming the 90 days trading horizon Lendinvest PLC is expected to generate 3.34 times less return on investment than BH Macro. But when comparing it to its historical volatility, Lendinvest PLC is 1.25 times less risky than BH Macro. It trades about 0.08 of its potential returns per unit of risk. BH Macro Limited is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 382.00 in BH Macro Limited on August 29, 2024 and sell it today you would earn a total of 26.00 from holding BH Macro Limited or generate 6.81% 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. BH Macro Limited
Performance |
| Timeline |
| Lendinvest PLC |
| BH Macro Limited |
Lendinvest PLC and BH Macro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendinvest PLC and BH Macro
The main advantage of trading using opposite Lendinvest PLC and BH Macro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendinvest PLC position performs unexpectedly, BH Macro 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 BH Macro will offset losses from the drop in BH Macro'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 |
| BH Macro vs. Toyota Motor Corp | BH Macro vs. Lendinvest PLC | BH Macro vs. Neometals | BH Macro vs. Coor Service 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 Stocks Directory module to find actively traded stocks across global markets.
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