Correlation Between Lendinvest PLC and St Galler

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

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

Diversification Opportunities for Lendinvest PLC and St Galler

0.25

Correlation Coefficient

Lendinvest PLC  St Galler

Modest diversification

The 3 months correlation between Lendinvest and 0QQZ is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Lendinvest PLC and St Galler Kantonalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on St Galler Kantonalbank and Lendinvest 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 Lendinvest PLC are associated (or correlated) with St Galler. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of St Galler Kantonalbank has no effect on the direction of Lendinvest PLC i.e., Lendinvest PLC and St Galler go up and down completely randomly.

Pair Corralation between Lendinvest PLC and St Galler

Assuming the 90 days trading horizon Lendinvest PLC is expected to generate 2.03 times less return on investment than St Galler. In addition to that, Lendinvest PLC is 2.23 times more volatile than St Galler Kantonalbank. It trades about 0.04 of its total potential returns per unit of risk. St Galler Kantonalbank is currently generating about 0.2 per unit of volatility. If you would invest  43,175  in St Galler Kantonalbank on December 2, 2024 and sell it today you would earn a total of  4,075  from holding St Galler Kantonalbank or generate 9.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Lendinvest PLC  vs.  St Galler Kantonalbank

Lendinvest PLC

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lendinvest PLC are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Lendinvest PLC is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

St Galler Kantonalbank

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in St Galler Kantonalbank are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, St Galler may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Lendinvest PLC and St Galler

The main advantage of trading using opposite Lendinvest PLC and St Galler positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendinvest PLC position performs unexpectedly, St Galler 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 St Galler will offset losses from the drop in St Galler's long position.

The idea behind Lendinvest PLC and St Galler Kantonalbank 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.