Correlation Between Whitbread PLC and Lindsell Train
Can any of the company-specific risk be diversified away by investing in both Whitbread PLC and Lindsell Train 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 Whitbread PLC and Lindsell Train into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Whitbread PLC and Lindsell Train Investment, you can compare the effects of market volatilities on Whitbread PLC and Lindsell Train 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 Whitbread PLC with a short position of Lindsell Train. Check out your portfolio center. Please also check ongoing floating volatility patterns of Whitbread PLC and Lindsell Train.
Diversification Opportunities for Whitbread PLC and Lindsell Train
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Whitbread and Lindsell is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Whitbread PLC and Lindsell Train Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindsell Train Investment and Whitbread 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 Whitbread PLC are associated (or correlated) with Lindsell Train. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindsell Train Investment has no effect on the direction of Whitbread PLC i.e., Whitbread PLC and Lindsell Train go up and down completely randomly.
Pair Corralation between Whitbread PLC and Lindsell Train
Assuming the 90 days trading horizon Whitbread PLC is expected to under-perform the Lindsell Train. In addition to that, Whitbread PLC is 1.16 times more volatile than Lindsell Train Investment. It trades about -0.19 of its total potential returns per unit of risk. Lindsell Train Investment is currently generating about 0.03 per unit of volatility. If you would invest 84,400 in Lindsell Train Investment on November 28, 2024 and sell it today you would earn a total of 600.00 from holding Lindsell Train Investment or generate 0.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Whitbread PLC vs. Lindsell Train Investment
Performance |
| Timeline |
| Whitbread PLC |
| Lindsell Train Investment |
Whitbread PLC and Lindsell Train Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Whitbread PLC and Lindsell Train
The main advantage of trading using opposite Whitbread PLC and Lindsell Train positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Whitbread PLC position performs unexpectedly, Lindsell Train 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 Lindsell Train will offset losses from the drop in Lindsell Train's long position.| Whitbread PLC vs. Global Net Lease | Whitbread PLC vs. XLMedia PLC | Whitbread PLC vs. Virgin Wines UK | Whitbread PLC vs. Take Two Interactive Software |
| Lindsell Train vs. Central Asia Metals | Lindsell Train vs. JD Sports Fashion | Lindsell Train vs. Associated British Foods | Lindsell Train vs. AfriTin 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |