Correlation Between Abingdon Health and Liontrust Asset
Can any of the company-specific risk be diversified away by investing in both Abingdon Health 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 Abingdon Health and Liontrust Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abingdon Health Plc and Liontrust Asset Management, you can compare the effects of market volatilities on Abingdon Health 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 Abingdon Health with a short position of Liontrust Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abingdon Health and Liontrust Asset.
Diversification Opportunities for Abingdon Health and Liontrust Asset
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Abingdon and Liontrust is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Abingdon Health Plc 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 Abingdon Health 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 Abingdon Health Plc 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 Abingdon Health i.e., Abingdon Health and Liontrust Asset go up and down completely randomly.
Pair Corralation between Abingdon Health and Liontrust Asset
Assuming the 90 days trading horizon Abingdon Health Plc is expected to under-perform the Liontrust Asset. But the stock apears to be less risky and, when comparing its historical volatility, Abingdon Health Plc is 1.39 times less risky than Liontrust Asset. The stock trades about -0.46 of its potential returns per unit of risk. The Liontrust Asset Management is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 42,400 in Liontrust Asset Management on November 28, 2024 and sell it today you would lose (300.00) from holding Liontrust Asset Management or give up 0.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abingdon Health Plc vs. Liontrust Asset Management
Performance |
| Timeline |
| Abingdon Health Plc |
| Liontrust Asset Mana |
Abingdon Health and Liontrust Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abingdon Health and Liontrust Asset
The main advantage of trading using opposite Abingdon Health and Liontrust Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abingdon Health 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.| Abingdon Health vs. Spirent Communications plc | Abingdon Health vs. Hochschild Mining plc | Abingdon Health vs. Batm Advanced Communications | Abingdon Health vs. Extra Space Storage |
| Liontrust Asset vs. Empire Metals Limited | Liontrust Asset vs. Critical Metals Plc | Liontrust Asset vs. Aeorema Communications Plc | Liontrust Asset vs. Sovereign Metals |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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