Correlation Between Sack Lunch and Experian Plc

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

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

Diversification Opportunities for Sack Lunch and Experian Plc

0.68

Correlation Coefficient

Sack Lunch  Experian Plc

Poor diversification

The 3 months correlation between Sack and Experian is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Sack Lunch Productions and Experian plc PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Experian plc PK and Sack Lunch 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 Sack Lunch Productions are associated (or correlated) with Experian Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Experian plc PK has no effect on the direction of Sack Lunch i.e., Sack Lunch and Experian Plc go up and down completely randomly.

Pair Corralation between Sack Lunch and Experian Plc

Given the investment horizon of 90 days Sack Lunch Productions is expected to generate 17.43 times more return on investment than Experian Plc. However, Sack Lunch is 17.43 times more volatile than Experian plc PK. It trades about 0.09 of its potential returns per unit of risk. Experian plc PK is currently generating about 0.11 per unit of risk. If you would invest  1.10  in Sack Lunch Productions on December 29, 2024 and sell it today you would earn a total of  0.00  from holding Sack Lunch Productions or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Sack Lunch Productions  vs.  Experian plc PK

Sack Lunch Productions

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sack Lunch Productions are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain forward-looking signals, Sack Lunch disclosed solid returns over the last few months and may actually be approaching a breakup point.

Experian plc PK

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Experian plc PK are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain technical and fundamental indicators, Experian Plc may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Sack Lunch and Experian Plc

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

The idea behind Sack Lunch Productions and Experian plc PK 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.