Correlation Between Astar and Liontrust Asset
Can any of the company-specific risk be diversified away by investing in both Astar 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 Astar and Liontrust Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and Liontrust Asset Management, you can compare the effects of market volatilities on Astar 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 Astar with a short position of Liontrust Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and Liontrust Asset.
Diversification Opportunities for Astar and Liontrust Asset
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Astar and Liontrust is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Astar 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 Astar 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 Astar 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 Astar i.e., Astar and Liontrust Asset go up and down completely randomly.
Pair Corralation between Astar and Liontrust Asset
Assuming the 90 days trading horizon Astar is expected to generate 2.23 times more return on investment than Liontrust Asset. However, Astar is 2.23 times more volatile than Liontrust Asset Management. It trades about 0.01 of its potential returns per unit of risk. Liontrust Asset Management is currently generating about 0.02 per unit of risk. If you would invest 5.24 in Astar on November 2, 2024 and sell it today you would lose (0.27) from holding Astar or give up 5.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.88% |
| Values | Daily Returns |
Astar vs. Liontrust Asset Management
Performance |
| Timeline |
| Astar |
| Liontrust Asset Mana |
Astar and Liontrust Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astar and Liontrust Asset
The main advantage of trading using opposite Astar and Liontrust Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar 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.The idea behind Astar and Liontrust Asset Management 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.| Liontrust Asset vs. Charter Communications Cl | Liontrust Asset vs. Herald Investment Trust | Liontrust Asset vs. Vietnam Enterprise Investments | Liontrust Asset vs. Arrow Electronics |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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