Correlation Between Lindsell Train and Gaztransport
Can any of the company-specific risk be diversified away by investing in both Lindsell Train and Gaztransport 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 Gaztransport 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 Gaztransport et Technigaz, you can compare the effects of market volatilities on Lindsell Train and Gaztransport 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 Gaztransport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindsell Train and Gaztransport.
Diversification Opportunities for Lindsell Train and Gaztransport
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lindsell and Gaztransport is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Lindsell Train Investment and Gaztransport et Technigaz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport et Technigaz 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 Gaztransport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport et Technigaz has no effect on the direction of Lindsell Train i.e., Lindsell Train and Gaztransport go up and down completely randomly.
Pair Corralation between Lindsell Train and Gaztransport
Assuming the 90 days trading horizon Lindsell Train Investment is expected to under-perform the Gaztransport. In addition to that, Lindsell Train is 1.39 times more volatile than Gaztransport et Technigaz. It trades about -0.04 of its total potential returns per unit of risk. Gaztransport et Technigaz is currently generating about 0.21 per unit of volatility. If you would invest 13,300 in Gaztransport et Technigaz on August 24, 2024 and sell it today you would earn a total of 905.00 from holding Gaztransport et Technigaz or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lindsell Train Investment vs. Gaztransport et Technigaz
Performance |
| Timeline |
| Lindsell Train Investment |
| Gaztransport et Technigaz |
Lindsell Train and Gaztransport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lindsell Train and Gaztransport
The main advantage of trading using opposite Lindsell Train and Gaztransport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindsell Train position performs unexpectedly, Gaztransport 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 Gaztransport will offset losses from the drop in Gaztransport's long position.| Lindsell Train vs. Home Depot | Lindsell Train vs. River and Mercantile | Lindsell Train vs. Chrysalis Investments | Lindsell Train vs. Sherborne Investors Guernsey |
| Gaztransport vs. Systemair AB | Gaztransport vs. Finnair Oyj | Gaztransport vs. Zegona Communications Plc | Gaztransport vs. Gamma Communications PLC |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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