Correlation Between Trainline Plc and Henderson High
Can any of the company-specific risk be diversified away by investing in both Trainline Plc and Henderson High 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 Trainline Plc and Henderson High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trainline Plc and Henderson High Income, you can compare the effects of market volatilities on Trainline Plc and Henderson High 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 Trainline Plc with a short position of Henderson High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trainline Plc and Henderson High.
Diversification Opportunities for Trainline Plc and Henderson High
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Trainline and Henderson is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Trainline Plc and Henderson High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henderson High Income and Trainline Plc 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 Trainline Plc are associated (or correlated) with Henderson High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henderson High Income has no effect on the direction of Trainline Plc i.e., Trainline Plc and Henderson High go up and down completely randomly.
Pair Corralation between Trainline Plc and Henderson High
Assuming the 90 days trading horizon Trainline Plc is expected to generate 2.83 times more return on investment than Henderson High. However, Trainline Plc is 2.83 times more volatile than Henderson High Income. It trades about 0.06 of its potential returns per unit of risk. Henderson High Income is currently generating about 0.05 per unit of risk. If you would invest 32,300 in Trainline Plc on September 14, 2024 and sell it today you would earn a total of 11,180 from holding Trainline Plc or generate 34.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trainline Plc vs. Henderson High Income
Performance |
| Timeline |
| Trainline Plc |
| Henderson High Income |
Trainline Plc and Henderson High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trainline Plc and Henderson High
The main advantage of trading using opposite Trainline Plc and Henderson High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trainline Plc position performs unexpectedly, Henderson High 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 Henderson High will offset losses from the drop in Henderson High's long position.| Trainline Plc vs. Charter Communications Cl | Trainline Plc vs. Schroders Investment Trusts | Trainline Plc vs. Taylor Maritime Investments | Trainline Plc vs. Spirent Communications plc |
| Henderson High vs. Catalyst Media Group | Henderson High vs. CATLIN GROUP | Henderson High vs. Tamburi Investment Partners | Henderson High vs. Magnora ASA |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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