Correlation Between Liontrust Asset and Cardinal Health
Can any of the company-specific risk be diversified away by investing in both Liontrust Asset and Cardinal Health 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 Liontrust Asset and Cardinal Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liontrust Asset Management and Cardinal Health, you can compare the effects of market volatilities on Liontrust Asset and Cardinal Health 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 Liontrust Asset with a short position of Cardinal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liontrust Asset and Cardinal Health.
Diversification Opportunities for Liontrust Asset and Cardinal Health
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Liontrust and Cardinal is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Liontrust Asset Management and Cardinal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Health and Liontrust Asset 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 Liontrust Asset Management are associated (or correlated) with Cardinal Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardinal Health has no effect on the direction of Liontrust Asset i.e., Liontrust Asset and Cardinal Health go up and down completely randomly.
Pair Corralation between Liontrust Asset and Cardinal Health
Assuming the 90 days trading horizon Liontrust Asset Management is expected to generate 1.41 times more return on investment than Cardinal Health. However, Liontrust Asset is 1.41 times more volatile than Cardinal Health. It trades about 0.05 of its potential returns per unit of risk. Cardinal Health is currently generating about -0.15 per unit of risk. If you would invest 44,962 in Liontrust Asset Management on September 25, 2024 and sell it today you would earn a total of 738.00 from holding Liontrust Asset Management or generate 1.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liontrust Asset Management vs. Cardinal Health
Performance |
| Timeline |
| Liontrust Asset Mana |
| Cardinal Health |
Liontrust Asset and Cardinal Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liontrust Asset and Cardinal Health
The main advantage of trading using opposite Liontrust Asset and Cardinal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liontrust Asset position performs unexpectedly, Cardinal Health 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 Cardinal Health will offset losses from the drop in Cardinal Health's long position.| Liontrust Asset vs. Cembra Money Bank | Liontrust Asset vs. CleanTech Lithium plc | Liontrust Asset vs. AfriTin Mining | Liontrust Asset vs. OneSavings Bank PLC |
| Cardinal Health vs. European Metals Holdings | Cardinal Health vs. Nordic Semiconductor ASA | Cardinal Health vs. Cairn Homes PLC | Cardinal Health vs. bet at home AG |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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