Correlation Between Lindsell Train and Southern Copper
Can any of the company-specific risk be diversified away by investing in both Lindsell Train and Southern Copper 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 Southern Copper 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 Southern Copper Corp, you can compare the effects of market volatilities on Lindsell Train and Southern Copper 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 Southern Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindsell Train and Southern Copper.
Diversification Opportunities for Lindsell Train and Southern Copper
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lindsell and Southern is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Lindsell Train Investment and Southern Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Copper Corp 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 Southern Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Copper Corp has no effect on the direction of Lindsell Train i.e., Lindsell Train and Southern Copper go up and down completely randomly.
Pair Corralation between Lindsell Train and Southern Copper
Assuming the 90 days trading horizon Lindsell Train Investment is expected to under-perform the Southern Copper. But the stock apears to be less risky and, when comparing its historical volatility, Lindsell Train Investment is 1.52 times less risky than Southern Copper. The stock trades about -0.15 of its potential returns per unit of risk. The Southern Copper Corp is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 9,215 in Southern Copper Corp on December 7, 2024 and sell it today you would lose (113.00) from holding Southern Copper Corp or give up 1.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lindsell Train Investment vs. Southern Copper Corp
Performance |
| Timeline |
| Lindsell Train Investment |
| Southern Copper Corp |
Lindsell Train and Southern Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lindsell Train and Southern Copper
The main advantage of trading using opposite Lindsell Train and Southern Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindsell Train position performs unexpectedly, Southern Copper 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 Southern Copper will offset losses from the drop in Southern Copper's long position.| Lindsell Train vs. Golden Metal Resources | Lindsell Train vs. Hecla Mining Co | Lindsell Train vs. Resolute Mining Limited | Lindsell Train vs. GreenX Metals |
| Southern Copper vs. Arrow Electronics | Southern Copper vs. Samsung Electronics Co | Southern Copper vs. Advanced Medical Solutions | Southern Copper vs. Medical Properties Trust |
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 CEOs Directory module to screen CEOs from public companies around the world.
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