Correlation Between Scottish Mortgage and Lenovo Group
Can any of the company-specific risk be diversified away by investing in both Scottish Mortgage and Lenovo Group 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 Scottish Mortgage and Lenovo Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scottish Mortgage Investment and Lenovo Group Limited, you can compare the effects of market volatilities on Scottish Mortgage and Lenovo Group 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 Scottish Mortgage with a short position of Lenovo Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scottish Mortgage and Lenovo Group.
Diversification Opportunities for Scottish Mortgage and Lenovo Group
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Scottish and Lenovo is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Scottish Mortgage Investment and Lenovo Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lenovo Group Limited and Scottish Mortgage 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 Scottish Mortgage Investment are associated (or correlated) with Lenovo Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lenovo Group Limited has no effect on the direction of Scottish Mortgage i.e., Scottish Mortgage and Lenovo Group go up and down completely randomly.
Pair Corralation between Scottish Mortgage and Lenovo Group
Assuming the 90 days trading horizon Scottish Mortgage Investment is expected to generate 0.43 times more return on investment than Lenovo Group. However, Scottish Mortgage Investment is 2.34 times less risky than Lenovo Group. It trades about 0.2 of its potential returns per unit of risk. Lenovo Group Limited is currently generating about 0.01 per unit of risk. If you would invest 1,016 in Scottish Mortgage Investment on October 9, 2024 and sell it today you would earn a total of 152.00 from holding Scottish Mortgage Investment or generate 14.96% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Scottish Mortgage Investment vs. Lenovo Group Limited
Performance |
Timeline |
Scottish Mortgage |
Lenovo Group Limited |
Scottish Mortgage and Lenovo Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Scottish Mortgage and Lenovo Group
The main advantage of trading using opposite Scottish Mortgage and Lenovo Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scottish Mortgage position performs unexpectedly, Lenovo Group 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 Lenovo Group will offset losses from the drop in Lenovo Group's long position.Scottish Mortgage vs. GREENX METALS LTD | Scottish Mortgage vs. Martin Marietta Materials | Scottish Mortgage vs. THRACE PLASTICS | Scottish Mortgage vs. Stag Industrial |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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