Correlation Between Lindsell Train and Anglesey Mining
Can any of the company-specific risk be diversified away by investing in both Lindsell Train and Anglesey Mining 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 Anglesey Mining 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 Anglesey Mining, you can compare the effects of market volatilities on Lindsell Train and Anglesey Mining 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 Anglesey Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindsell Train and Anglesey Mining.
Diversification Opportunities for Lindsell Train and Anglesey Mining
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lindsell and Anglesey is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Lindsell Train Investment and Anglesey Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglesey Mining 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 Anglesey Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglesey Mining has no effect on the direction of Lindsell Train i.e., Lindsell Train and Anglesey Mining go up and down completely randomly.
Pair Corralation between Lindsell Train and Anglesey Mining
Assuming the 90 days trading horizon Lindsell Train Investment is expected to generate 0.15 times more return on investment than Anglesey Mining. However, Lindsell Train Investment is 6.75 times less risky than Anglesey Mining. It trades about 0.25 of its potential returns per unit of risk. Anglesey Mining is currently generating about -0.04 per unit of risk. If you would invest 79,300 in Lindsell Train Investment on October 28, 2024 and sell it today you would earn a total of 4,700 from holding Lindsell Train Investment or generate 5.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lindsell Train Investment vs. Anglesey Mining
Performance |
| Timeline |
| Lindsell Train Investment |
| Anglesey Mining |
Lindsell Train and Anglesey Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lindsell Train and Anglesey Mining
The main advantage of trading using opposite Lindsell Train and Anglesey Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindsell Train position performs unexpectedly, Anglesey Mining 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 Anglesey Mining will offset losses from the drop in Anglesey Mining's long position.| Lindsell Train vs. SupplyMe Capital PLC | Lindsell Train vs. Premier African Minerals | Lindsell Train vs. SANTANDER UK 8 | Lindsell Train vs. Tower Resources plc |
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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