Correlation Between Marks and Lenta PLC
Can any of the company-specific risk be diversified away by investing in both Marks and Lenta PLC 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 Marks and Lenta PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marks and Spencer and Lenta PLC, you can compare the effects of market volatilities on Marks and Lenta PLC 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 Marks with a short position of Lenta PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marks and Lenta PLC.
Diversification Opportunities for Marks and Lenta PLC
Pay attention - limited upside
The 3 months correlation between Marks and Lenta is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Marks and Spencer and Lenta PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lenta PLC and Marks 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 Marks and Spencer are associated (or correlated) with Lenta PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lenta PLC has no effect on the direction of Marks i.e., Marks and Lenta PLC go up and down completely randomly.
Pair Corralation between Marks and Lenta PLC
If you would invest 146.00 in Marks and Spencer on August 30, 2024 and sell it today you would earn a total of 299.00 from holding Marks and Spencer or generate 204.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 43.15% |
| Values | Daily Returns |
Marks and Spencer vs. Lenta PLC
Performance |
| Timeline |
| Marks and Spencer |
| Lenta PLC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Marks and Lenta PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marks and Lenta PLC
The main advantage of trading using opposite Marks and Lenta PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marks position performs unexpectedly, Lenta PLC 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 Lenta PLC will offset losses from the drop in Lenta PLC's long position.The idea behind Marks and Spencer and Lenta PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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