Correlation Between Lindsell Train and Centaur Media
Can any of the company-specific risk be diversified away by investing in both Lindsell Train and Centaur Media 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 Centaur Media 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 Centaur Media, you can compare the effects of market volatilities on Lindsell Train and Centaur Media 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 Centaur Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindsell Train and Centaur Media.
Diversification Opportunities for Lindsell Train and Centaur Media
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lindsell and Centaur is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Lindsell Train Investment and Centaur Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centaur Media 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 Centaur Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centaur Media has no effect on the direction of Lindsell Train i.e., Lindsell Train and Centaur Media go up and down completely randomly.
Pair Corralation between Lindsell Train and Centaur Media
Assuming the 90 days trading horizon Lindsell Train Investment is expected to generate 0.88 times more return on investment than Centaur Media. However, Lindsell Train Investment is 1.14 times less risky than Centaur Media. It trades about 0.34 of its potential returns per unit of risk. Centaur Media is currently generating about -0.15 per unit of risk. If you would invest 72,100 in Lindsell Train Investment on September 20, 2024 and sell it today you would earn a total of 9,000 from holding Lindsell Train Investment or generate 12.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lindsell Train Investment vs. Centaur Media
Performance |
| Timeline |
| Lindsell Train Investment |
| Centaur Media |
Lindsell Train and Centaur Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lindsell Train and Centaur Media
The main advantage of trading using opposite Lindsell Train and Centaur Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindsell Train position performs unexpectedly, Centaur Media 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 Centaur Media will offset losses from the drop in Centaur Media's long position.| Lindsell Train vs. Catalyst Media Group | Lindsell Train vs. CATLIN GROUP | Lindsell Train vs. Tamburi Investment Partners | Lindsell Train vs. Magnora ASA |
| Centaur Media vs. Lindsell Train Investment | Centaur Media vs. Norman Broadbent Plc | Centaur Media vs. Kaufman Et Broad | Centaur Media vs. Capital Drilling |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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