Correlation Between Lindsell Train and Sligro Food
Can any of the company-specific risk be diversified away by investing in both Lindsell Train and Sligro Food 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 Sligro Food 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 Sligro Food Group, you can compare the effects of market volatilities on Lindsell Train and Sligro Food 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 Sligro Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindsell Train and Sligro Food.
Diversification Opportunities for Lindsell Train and Sligro Food
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lindsell and Sligro is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Lindsell Train Investment and Sligro Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sligro Food Group 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 Sligro Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sligro Food Group has no effect on the direction of Lindsell Train i.e., Lindsell Train and Sligro Food go up and down completely randomly.
Pair Corralation between Lindsell Train and Sligro Food
Assuming the 90 days trading horizon Lindsell Train Investment is expected to generate 1.25 times more return on investment than Sligro Food. However, Lindsell Train is 1.25 times more volatile than Sligro Food Group. It trades about 0.05 of its potential returns per unit of risk. Sligro Food Group is currently generating about 0.04 per unit of risk. If you would invest 85,400 in Lindsell Train Investment on November 29, 2024 and sell it today you would earn a total of 1,000.00 from holding Lindsell Train Investment or generate 1.17% 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. Sligro Food Group
Performance |
| Timeline |
| Lindsell Train Investment |
| Sligro Food Group |
Lindsell Train and Sligro Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lindsell Train and Sligro Food
The main advantage of trading using opposite Lindsell Train and Sligro Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindsell Train position performs unexpectedly, Sligro Food 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 Sligro Food will offset losses from the drop in Sligro Food's long position.| Lindsell Train vs. Resolute Mining Limited | Lindsell Train vs. Endeavour Mining Corp | Lindsell Train vs. Silvercorp Metals | Lindsell Train vs. Pan American Silver |
| Sligro Food vs. Batm Advanced Communications | Sligro Food vs. Eastinco Mining Exploration | Sligro Food vs. Silvercorp Metals | Sligro Food vs. Verizon Communications |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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