Correlation Between TRAINLINE PLC and HALSTEAD JAMES | 2T9A.F vs. HSJA.F

Correlation Between TRAINLINE PLC and HALSTEAD JAMES

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Can any of the company-specific risk be diversified away by investing in both TRAINLINE PLC and HALSTEAD JAMES 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 HALSTEAD JAMES 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 HALSTEAD JAMES LS 05, you can compare the effects of market volatilities on TRAINLINE PLC and HALSTEAD JAMES 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 HALSTEAD JAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRAINLINE PLC and HALSTEAD JAMES.

Diversification Opportunities for TRAINLINE PLC and HALSTEAD JAMES

0.7
  Correlation Coefficient

Poor diversification

The 3 months correlation between TRAINLINE and HALSTEAD is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding TRAINLINE PLC LS and HALSTEAD JAMES LS 05 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HALSTEAD JAMES LS 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 HALSTEAD JAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HALSTEAD JAMES LS has no effect on the direction of TRAINLINE PLC i.e., TRAINLINE PLC and HALSTEAD JAMES go up and down completely randomly.

Pair Corralation between TRAINLINE PLC and HALSTEAD JAMES

Assuming the 90 days trading horizon TRAINLINE PLC LS is expected to generate 1.34 times more return on investment than HALSTEAD JAMES. However, TRAINLINE PLC is 1.34 times more volatile than HALSTEAD JAMES LS 05. It trades about 0.05 of its potential returns per unit of risk. HALSTEAD JAMES LS 05 is currently generating about 0.02 per unit of risk. If you would invest  322.00  in TRAINLINE PLC LS on September 30, 2024 and sell it today you would earn a total of  193.00  from holding TRAINLINE PLC LS or generate 59.94% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

TRAINLINE PLC LS  vs.  HALSTEAD JAMES LS 05

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec 051015202530
JavaScript chart by amCharts 3.21.152T9A HSJA
       Timeline  
TRAINLINE PLC LS 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in TRAINLINE PLC LS are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, TRAINLINE PLC reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecDec3.844.24.44.64.855.2
HALSTEAD JAMES LS 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in HALSTEAD JAMES LS 05 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking indicators, HALSTEAD JAMES may actually be approaching a critical reversion point that can send shares even higher in January 2025.
JavaScript chart by amCharts 3.21.15NovDecDec1.9522.052.12.152.22.252.3

TRAINLINE PLC and HALSTEAD JAMES Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-7.06-5.29-3.52-1.740.01.883.835.787.739.68 0.020.030.040.050.060.07
JavaScript chart by amCharts 3.21.152T9A HSJA
       Returns  

Pair Trading with TRAINLINE PLC and HALSTEAD JAMES

The main advantage of trading using opposite TRAINLINE PLC and HALSTEAD JAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRAINLINE PLC position performs unexpectedly, HALSTEAD JAMES 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 HALSTEAD JAMES will offset losses from the drop in HALSTEAD JAMES's long position.
The idea behind TRAINLINE PLC LS and HALSTEAD JAMES LS 05 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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