Correlation Between Liontrust Asset and GoldMining
Can any of the company-specific risk be diversified away by investing in both Liontrust Asset and GoldMining 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 GoldMining 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 GoldMining, you can compare the effects of market volatilities on Liontrust Asset and GoldMining 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 GoldMining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liontrust Asset and GoldMining.
Diversification Opportunities for Liontrust Asset and GoldMining
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Liontrust and GoldMining is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Liontrust Asset Management and GoldMining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoldMining 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 GoldMining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoldMining has no effect on the direction of Liontrust Asset i.e., Liontrust Asset and GoldMining go up and down completely randomly.
Pair Corralation between Liontrust Asset and GoldMining
Assuming the 90 days trading horizon Liontrust Asset Management is expected to generate 1.02 times more return on investment than GoldMining. However, Liontrust Asset is 1.02 times more volatile than GoldMining. It trades about -0.05 of its potential returns per unit of risk. GoldMining is currently generating about -0.17 per unit of risk. If you would invest 47,150 in Liontrust Asset Management on August 24, 2024 and sell it today you would lose (2,050) from holding Liontrust Asset Management or give up 4.35% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 60.87% |
Values | Daily Returns |
Liontrust Asset Management vs. GoldMining
Performance |
Timeline |
Liontrust Asset Mana |
GoldMining |
Liontrust Asset and GoldMining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Liontrust Asset and GoldMining
The main advantage of trading using opposite Liontrust Asset and GoldMining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liontrust Asset position performs unexpectedly, GoldMining 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 GoldMining will offset losses from the drop in GoldMining's long position.Liontrust Asset vs. Home Depot | Liontrust Asset vs. River and Mercantile | Liontrust Asset vs. Chrysalis Investments | Liontrust Asset vs. Sherborne Investors Guernsey |
GoldMining vs. Quadrise Plc | GoldMining vs. Intuitive Investments Group | GoldMining vs. European Metals Holdings | GoldMining vs. Athelney Trust plc |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |