Correlation Between Dillards Capital and Lenta PLC

Can any of the company-specific risk be diversified away by investing in both Dillards Capital 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 Dillards Capital and Lenta PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dillards Capital Trust and Lenta PLC, you can compare the effects of market volatilities on Dillards Capital 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 Dillards Capital with a short position of Lenta PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dillards Capital and Lenta PLC.

Diversification Opportunities for Dillards Capital and Lenta PLC

0.0

Correlation Coefficient

Dillards Capital  Lenta PLC

Pay attention - limited upside

The 3 months correlation between Dillards and Lenta is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Dillards Capital Trust and Lenta PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lenta PLC and Dillards Capital 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 Dillards Capital Trust 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 Dillards Capital i.e., Dillards Capital and Lenta PLC go up and down completely randomly.

Pair Corralation between Dillards Capital and Lenta PLC

If you would invest  2,535  in Dillards Capital Trust on December 30, 2024 and sell it today you would earn a total of  46.00  from holding Dillards Capital Trust or generate 1.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Dillards Capital Trust  vs.  Lenta PLC

Dillards Capital Trust

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dillards Capital Trust are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, Dillards Capital is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Lenta PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lenta PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Lenta PLC is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dillards Capital and Lenta PLC

The main advantage of trading using opposite Dillards Capital and Lenta PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dillards Capital 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 Dillards Capital Trust 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.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.