Correlation Between Balfour Beatty and Liontrust Asset
Can any of the company-specific risk be diversified away by investing in both Balfour Beatty 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 Balfour Beatty and Liontrust Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balfour Beatty plc and Liontrust Asset Management, you can compare the effects of market volatilities on Balfour Beatty 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 Balfour Beatty with a short position of Liontrust Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balfour Beatty and Liontrust Asset.
Diversification Opportunities for Balfour Beatty and Liontrust Asset
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Balfour and Liontrust is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Balfour Beatty 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 Balfour Beatty 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 Balfour Beatty 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 Balfour Beatty i.e., Balfour Beatty and Liontrust Asset go up and down completely randomly.
Pair Corralation between Balfour Beatty and Liontrust Asset
Assuming the 90 days trading horizon Balfour Beatty plc is expected to generate 0.58 times more return on investment than Liontrust Asset. However, Balfour Beatty plc is 1.72 times less risky than Liontrust Asset. It trades about 0.11 of its potential returns per unit of risk. Liontrust Asset Management is currently generating about 0.0 per unit of risk. If you would invest 31,726 in Balfour Beatty plc on September 14, 2024 and sell it today you would earn a total of 13,694 from holding Balfour Beatty plc or generate 43.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Balfour Beatty plc vs. Liontrust Asset Management
Performance |
| Timeline |
| Balfour Beatty plc |
| Liontrust Asset Mana |
Balfour Beatty and Liontrust Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Balfour Beatty and Liontrust Asset
The main advantage of trading using opposite Balfour Beatty and Liontrust Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balfour Beatty 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.| Balfour Beatty vs. Liontrust Asset Management | Balfour Beatty vs. Catena Media PLC | Balfour Beatty vs. Liberty Media Corp | Balfour Beatty vs. MediaZest plc |
| Liontrust Asset vs. Catalyst Media Group | Liontrust Asset vs. CATLIN GROUP | Liontrust Asset vs. Tamburi Investment Partners | Liontrust Asset vs. Magnora ASA |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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