Correlation Between Liontrust Asset and SBM Offshore
Can any of the company-specific risk be diversified away by investing in both Liontrust Asset and SBM Offshore 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 SBM Offshore 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 SBM Offshore NV, you can compare the effects of market volatilities on Liontrust Asset and SBM Offshore 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 SBM Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liontrust Asset and SBM Offshore.
Diversification Opportunities for Liontrust Asset and SBM Offshore
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Liontrust and SBM is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Liontrust Asset Management and SBM Offshore NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBM Offshore NV 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 SBM Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBM Offshore NV has no effect on the direction of Liontrust Asset i.e., Liontrust Asset and SBM Offshore go up and down completely randomly.
Pair Corralation between Liontrust Asset and SBM Offshore
Assuming the 90 days trading horizon Liontrust Asset Management is expected to under-perform the SBM Offshore. In addition to that, Liontrust Asset is 1.31 times more volatile than SBM Offshore NV. It trades about 0.0 of its total potential returns per unit of risk. SBM Offshore NV is currently generating about 0.1 per unit of volatility. If you would invest 1,143 in SBM Offshore NV on August 31, 2024 and sell it today you would earn a total of 570.00 from holding SBM Offshore NV or generate 49.87% 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. SBM Offshore NV
Performance |
| Timeline |
| Liontrust Asset Mana |
| SBM Offshore NV |
Liontrust Asset and SBM Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liontrust Asset and SBM Offshore
The main advantage of trading using opposite Liontrust Asset and SBM Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liontrust Asset position performs unexpectedly, SBM Offshore 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 SBM Offshore will offset losses from the drop in SBM Offshore's long position.| Liontrust Asset vs. Universal Health Services | Liontrust Asset vs. Universal Display Corp | Liontrust Asset vs. Futura Medical | Liontrust Asset vs. Bellevue Healthcare Trust |
| SBM Offshore vs. AcadeMedia AB | SBM Offshore vs. Zinc Media Group | SBM Offshore vs. Auction Technology Group | SBM Offshore vs. Hollywood Bowl 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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