Correlation Between Link Reservations and Haleon Plc

Can any of the company-specific risk be diversified away by investing in both Link Reservations and Haleon 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 Link Reservations and Haleon Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Link Reservations and Haleon plc, you can compare the effects of market volatilities on Link Reservations and Haleon 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 Link Reservations with a short position of Haleon Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Link Reservations and Haleon Plc.

Diversification Opportunities for Link Reservations and Haleon Plc

0.0

Correlation Coefficient

Link Reservations  Haleon Plc

Pay attention - limited upside

The 3 months correlation between Link and Haleon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Link Reservations and Haleon plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haleon plc and Link Reservations 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 Link Reservations are associated (or correlated) with Haleon Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haleon plc has no effect on the direction of Link Reservations i.e., Link Reservations and Haleon Plc go up and down completely randomly.

Pair Corralation between Link Reservations and Haleon Plc

If you would invest  481.00  in Haleon plc on December 28, 2024 and sell it today you would earn a total of  25.00  from holding Haleon plc or generate 5.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Link Reservations  vs.  Haleon plc

Link Reservations

Risk-Adjusted Performance

Very Weak

Over the last 90 days Link Reservations has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Link Reservations is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Haleon plc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Haleon plc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting fundamental indicators, Haleon Plc may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Link Reservations and Haleon Plc

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

The idea behind Link Reservations and Haleon 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.