Correlation Between Lindsell Train and Deutsche Post
Can any of the company-specific risk be diversified away by investing in both Lindsell Train and Deutsche Post 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 Lindsell Train and Deutsche Post into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lindsell Train Investment and Deutsche Post AG, you can compare the effects of market volatilities on Lindsell Train and Deutsche Post 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 Lindsell Train with a short position of Deutsche Post. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindsell Train and Deutsche Post.
Diversification Opportunities for Lindsell Train and Deutsche Post
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lindsell and Deutsche is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Lindsell Train Investment and Deutsche Post AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Post AG and Lindsell Train 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 Lindsell Train Investment are associated (or correlated) with Deutsche Post. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Post AG has no effect on the direction of Lindsell Train i.e., Lindsell Train and Deutsche Post go up and down completely randomly.
Pair Corralation between Lindsell Train and Deutsche Post
Assuming the 90 days trading horizon Lindsell Train is expected to generate 1.15 times less return on investment than Deutsche Post. But when comparing it to its historical volatility, Lindsell Train Investment is 1.22 times less risky than Deutsche Post. It trades about 0.22 of its potential returns per unit of risk. Deutsche Post AG is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 3,358 in Deutsche Post AG on October 24, 2024 and sell it today you would earn a total of 206.00 from holding Deutsche Post AG or generate 6.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lindsell Train Investment vs. Deutsche Post AG
Performance |
| Timeline |
| Lindsell Train Investment |
| Deutsche Post AG |
Lindsell Train and Deutsche Post Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lindsell Train and Deutsche Post
The main advantage of trading using opposite Lindsell Train and Deutsche Post positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindsell Train position performs unexpectedly, Deutsche Post 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 Deutsche Post will offset losses from the drop in Deutsche Post's long position.| Lindsell Train vs. Verizon Communications | Lindsell Train vs. Alliance Data Systems | Lindsell Train vs. Zegona Communications Plc | Lindsell Train vs. Fresenius Medical Care |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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