Correlation Between TRAINLINE PLC and LOral SA
Can any of the company-specific risk be diversified away by investing in both TRAINLINE PLC and LOral SA 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 LOral SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRAINLINE PLC LS and LOral SA, you can compare the effects of market volatilities on TRAINLINE PLC and LOral SA 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 LOral SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRAINLINE PLC and LOral SA.
Diversification Opportunities for TRAINLINE PLC and LOral SA
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TRAINLINE and LOral is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding TRAINLINE PLC LS and LOral SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOral SA 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 LS are associated (or correlated) with LOral SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOral SA has no effect on the direction of TRAINLINE PLC i.e., TRAINLINE PLC and LOral SA go up and down completely randomly.
Pair Corralation between TRAINLINE PLC and LOral SA
Assuming the 90 days trading horizon TRAINLINE PLC LS is expected to under-perform the LOral SA. In addition to that, TRAINLINE PLC is 2.43 times more volatile than LOral SA. It trades about -0.18 of its total potential returns per unit of risk. LOral SA is currently generating about 0.06 per unit of volatility. If you would invest 34,025 in LOral SA on December 22, 2024 and sell it today you would earn a total of 1,745 from holding LOral SA or generate 5.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
TRAINLINE PLC LS vs. LOral SA
Performance |
Timeline |
TRAINLINE PLC LS |
LOral SA |
TRAINLINE PLC and LOral SA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with TRAINLINE PLC and LOral SA
The main advantage of trading using opposite TRAINLINE PLC and LOral SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRAINLINE PLC position performs unexpectedly, LOral SA 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 LOral SA will offset losses from the drop in LOral SA's long position.TRAINLINE PLC vs. Strategic Education | TRAINLINE PLC vs. EEDUCATION ALBERT AB | TRAINLINE PLC vs. UNIVERSAL DISPLAY | TRAINLINE PLC vs. CHINA EDUCATION GROUP |
LOral SA vs. CONTAGIOUS GAMING INC | LOral SA vs. Ultra Clean Holdings | LOral SA vs. BRAGG GAMING GRP | LOral SA vs. New Residential 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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