Correlation Between FMC Corp and Liontrust Asset
Can any of the company-specific risk be diversified away by investing in both FMC Corp and Liontrust Asset 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 FMC Corp and Liontrust Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FMC Corp and Liontrust Asset Management, you can compare the effects of market volatilities on FMC Corp and Liontrust Asset 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 FMC Corp with a short position of Liontrust Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of FMC Corp and Liontrust Asset.
Diversification Opportunities for FMC Corp and Liontrust Asset
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FMC and Liontrust is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding FMC Corp and Liontrust Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liontrust Asset Mana and FMC Corp 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 FMC Corp are associated (or correlated) with Liontrust Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liontrust Asset Mana has no effect on the direction of FMC Corp i.e., FMC Corp and Liontrust Asset go up and down completely randomly.
Pair Corralation between FMC Corp and Liontrust Asset
Assuming the 90 days trading horizon FMC Corp is expected to under-perform the Liontrust Asset. In addition to that, FMC Corp is 1.06 times more volatile than Liontrust Asset Management. It trades about -0.04 of its total potential returns per unit of risk. Liontrust Asset Management is currently generating about -0.03 per unit of volatility. If you would invest 83,804 in Liontrust Asset Management on September 12, 2024 and sell it today you would lose (34,904) from holding Liontrust Asset Management or give up 41.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.77% |
| Values | Daily Returns |
FMC Corp vs. Liontrust Asset Management
Performance |
| Timeline |
| FMC Corp |
| Liontrust Asset Mana |
FMC Corp and Liontrust Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FMC Corp and Liontrust Asset
The main advantage of trading using opposite FMC Corp and Liontrust Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FMC Corp position performs unexpectedly, Liontrust Asset 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 Liontrust Asset will offset losses from the drop in Liontrust Asset's long position.| FMC Corp vs. Liontrust Asset Management | FMC Corp vs. Bisichi Mining PLC | FMC Corp vs. SMA Solar Technology | FMC Corp vs. Spotify Technology SA |
| Liontrust Asset vs. Sealed Air Corp | Liontrust Asset vs. Cardinal Health | Liontrust Asset vs. Porvair plc | Liontrust Asset vs. Inspiration Healthcare Group |
Check out your portfolio center.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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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