Correlation Between Lindsell Train and Cembra Money
Can any of the company-specific risk be diversified away by investing in both Lindsell Train and Cembra Money 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 Cembra Money 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 Cembra Money Bank, you can compare the effects of market volatilities on Lindsell Train and Cembra Money 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 Cembra Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindsell Train and Cembra Money.
Diversification Opportunities for Lindsell Train and Cembra Money
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lindsell and Cembra is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Lindsell Train Investment and Cembra Money Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cembra Money Bank 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 Cembra Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cembra Money Bank has no effect on the direction of Lindsell Train i.e., Lindsell Train and Cembra Money go up and down completely randomly.
Pair Corralation between Lindsell Train and Cembra Money
Assuming the 90 days trading horizon Lindsell Train Investment is expected to under-perform the Cembra Money. In addition to that, Lindsell Train is 1.17 times more volatile than Cembra Money Bank. It trades about -0.04 of its total potential returns per unit of risk. Cembra Money Bank is currently generating about 0.03 per unit of volatility. If you would invest 7,110 in Cembra Money Bank on September 26, 2024 and sell it today you would earn a total of 1,045 from holding Cembra Money Bank or generate 14.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Lindsell Train Investment vs. Cembra Money Bank
Performance |
| Timeline |
| Lindsell Train Investment |
| Cembra Money Bank |
Lindsell Train and Cembra Money Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lindsell Train and Cembra Money
The main advantage of trading using opposite Lindsell Train and Cembra Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindsell Train position performs unexpectedly, Cembra Money 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 Cembra Money will offset losses from the drop in Cembra Money's long position.| Lindsell Train vs. Samsung Electronics Co | Lindsell Train vs. Samsung Electronics Co | Lindsell Train vs. Hyundai Motor | Lindsell Train vs. Toyota Motor Corp |
| Cembra Money vs. Park Hotels Resorts | Cembra Money vs. Lindsell Train Investment | Cembra Money vs. PPHE Hotel Group | Cembra Money vs. Air Products Chemicals |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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