Correlation Between Lindsell Train and Vodafone Group
Can any of the company-specific risk be diversified away by investing in both Lindsell Train and Vodafone Group 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 Vodafone Group 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 Vodafone Group PLC, you can compare the effects of market volatilities on Lindsell Train and Vodafone Group 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 Vodafone Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindsell Train and Vodafone Group.
Diversification Opportunities for Lindsell Train and Vodafone Group
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lindsell and Vodafone is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Lindsell Train Investment and Vodafone Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vodafone Group PLC 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 Vodafone Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vodafone Group PLC has no effect on the direction of Lindsell Train i.e., Lindsell Train and Vodafone Group go up and down completely randomly.
Pair Corralation between Lindsell Train and Vodafone Group
Assuming the 90 days trading horizon Lindsell Train Investment is expected to generate 2.38 times more return on investment than Vodafone Group. However, Lindsell Train is 2.38 times more volatile than Vodafone Group PLC. It trades about 0.21 of its potential returns per unit of risk. Vodafone Group PLC is currently generating about -0.42 per unit of risk. If you would invest 74,700 in Lindsell Train Investment on October 13, 2024 and sell it today you would earn a total of 5,900 from holding Lindsell Train Investment or generate 7.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Lindsell Train Investment vs. Vodafone Group PLC
Performance |
| Timeline |
| Lindsell Train Investment |
| Vodafone Group PLC |
Lindsell Train and Vodafone Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lindsell Train and Vodafone Group
The main advantage of trading using opposite Lindsell Train and Vodafone Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindsell Train position performs unexpectedly, Vodafone Group 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 Vodafone Group will offset losses from the drop in Vodafone Group's long position.| Lindsell Train vs. Gamma Communications PLC | Lindsell Train vs. Telecom Italia SpA | Lindsell Train vs. Cellnex Telecom SA | Lindsell Train vs. Universal Display Corp |
| Vodafone Group vs. Seraphim Space Investment | Vodafone Group vs. Lindsell Train Investment | Vodafone Group vs. GlobalData PLC | Vodafone Group vs. Aberdeen Diversified Income |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |