Correlation Between Lindsell Train and Apax Global
Can any of the company-specific risk be diversified away by investing in both Lindsell Train and Apax Global 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 Apax Global 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 Apax Global Alpha, you can compare the effects of market volatilities on Lindsell Train and Apax Global 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 Apax Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindsell Train and Apax Global.
Diversification Opportunities for Lindsell Train and Apax Global
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lindsell and Apax is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Lindsell Train Investment and Apax Global Alpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apax Global Alpha 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 Apax Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apax Global Alpha has no effect on the direction of Lindsell Train i.e., Lindsell Train and Apax Global go up and down completely randomly.
Pair Corralation between Lindsell Train and Apax Global
Assuming the 90 days trading horizon Lindsell Train Investment is expected to under-perform the Apax Global. But the stock apears to be less risky and, when comparing its historical volatility, Lindsell Train Investment is 1.05 times less risky than Apax Global. The stock trades about -0.05 of its potential returns per unit of risk. The Apax Global Alpha is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 15,355 in Apax Global Alpha on September 3, 2024 and sell it today you would lose (1,235) from holding Apax Global Alpha or give up 8.04% 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. Apax Global Alpha
Performance |
| Timeline |
| Lindsell Train Investment |
| Apax Global Alpha |
Lindsell Train and Apax Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lindsell Train and Apax Global
The main advantage of trading using opposite Lindsell Train and Apax Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindsell Train position performs unexpectedly, Apax Global 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 Apax Global will offset losses from the drop in Apax Global's long position.| Lindsell Train vs. SBM Offshore NV | Lindsell Train vs. Air Products Chemicals | Lindsell Train vs. Vienna Insurance Group | Lindsell Train vs. Thor Mining PLC |
| Apax Global vs. MTI Wireless Edge | Apax Global vs. Infrastrutture Wireless Italiane | Apax Global vs. Cizzle Biotechnology Holdings | Apax Global vs. National Beverage Corp |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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