Correlation Between Lendinvest PLC and Young Cos
Can any of the company-specific risk be diversified away by investing in both Lendinvest PLC and Young Cos 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 Young Cos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendinvest PLC and Young Cos Brewery, you can compare the effects of market volatilities on Lendinvest PLC and Young Cos 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 Young Cos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendinvest PLC and Young Cos.
Diversification Opportunities for Lendinvest PLC and Young Cos
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lendinvest and Young is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Lendinvest PLC and Young Cos Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Young Cos Brewery 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 Young Cos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Young Cos Brewery has no effect on the direction of Lendinvest PLC i.e., Lendinvest PLC and Young Cos go up and down completely randomly.
Pair Corralation between Lendinvest PLC and Young Cos
Assuming the 90 days trading horizon Lendinvest PLC is expected to under-perform the Young Cos. But the stock apears to be less risky and, when comparing its historical volatility, Lendinvest PLC is 1.12 times less risky than Young Cos. The stock trades about -0.02 of its potential returns per unit of risk. The Young Cos Brewery is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 70,617 in Young Cos Brewery on September 1, 2024 and sell it today you would lose (6,817) from holding Young Cos Brewery or give up 9.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lendinvest PLC vs. Young Cos Brewery
Performance |
| Timeline |
| Lendinvest PLC |
| Young Cos Brewery |
Lendinvest PLC and Young Cos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendinvest PLC and Young Cos
The main advantage of trading using opposite Lendinvest PLC and Young Cos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendinvest PLC position performs unexpectedly, Young Cos 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 Young Cos will offset losses from the drop in Young Cos' 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 |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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