Correlation Between Lindsell Train and Sancus Lending
Can any of the company-specific risk be diversified away by investing in both Lindsell Train and Sancus Lending 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 Sancus Lending 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 Sancus Lending Group, you can compare the effects of market volatilities on Lindsell Train and Sancus Lending 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 Sancus Lending. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindsell Train and Sancus Lending.
Diversification Opportunities for Lindsell Train and Sancus Lending
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lindsell and Sancus is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Lindsell Train Investment and Sancus Lending Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sancus Lending Group 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 Sancus Lending. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sancus Lending Group has no effect on the direction of Lindsell Train i.e., Lindsell Train and Sancus Lending go up and down completely randomly.
Pair Corralation between Lindsell Train and Sancus Lending
Assuming the 90 days trading horizon Lindsell Train Investment is expected to under-perform the Sancus Lending. But the stock apears to be less risky and, when comparing its historical volatility, Lindsell Train Investment is 6.65 times less risky than Sancus Lending. The stock trades about -0.04 of its potential returns per unit of risk. The Sancus Lending Group is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 160.00 in Sancus Lending Group on September 3, 2024 and sell it today you would lose (130.00) from holding Sancus Lending Group or give up 81.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lindsell Train Investment vs. Sancus Lending Group
Performance |
| Timeline |
| Lindsell Train Investment |
| Sancus Lending Group |
Lindsell Train and Sancus Lending Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lindsell Train and Sancus Lending
The main advantage of trading using opposite Lindsell Train and Sancus Lending positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindsell Train position performs unexpectedly, Sancus Lending 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 Sancus Lending will offset losses from the drop in Sancus Lending'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 |
| Sancus Lending vs. Kaufman Et Broad | Sancus Lending vs. Lindsell Train Investment | Sancus Lending vs. AfriTin Mining | Sancus Lending vs. Griffin Mining |
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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