Correlation Between Liontrust Asset and Induction Healthcare
Can any of the company-specific risk be diversified away by investing in both Liontrust Asset and Induction Healthcare 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 Induction Healthcare 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 Induction Healthcare Group, you can compare the effects of market volatilities on Liontrust Asset and Induction Healthcare 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 Induction Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liontrust Asset and Induction Healthcare.
Diversification Opportunities for Liontrust Asset and Induction Healthcare
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Liontrust and Induction is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Liontrust Asset Management and Induction Healthcare Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Induction Healthcare 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 Induction Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Induction Healthcare has no effect on the direction of Liontrust Asset i.e., Liontrust Asset and Induction Healthcare go up and down completely randomly.
Pair Corralation between Liontrust Asset and Induction Healthcare
Assuming the 90 days trading horizon Liontrust Asset Management is expected to generate 0.51 times more return on investment than Induction Healthcare. However, Liontrust Asset Management is 1.96 times less risky than Induction Healthcare. It trades about -0.26 of its potential returns per unit of risk. Induction Healthcare Group is currently generating about -0.33 per unit of risk. If you would invest 45,050 in Liontrust Asset Management on December 4, 2024 and sell it today you would lose (4,000) from holding Liontrust Asset Management or give up 8.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liontrust Asset Management vs. Induction Healthcare Group
Performance |
| Timeline |
| Liontrust Asset Mana |
| Induction Healthcare |
Liontrust Asset and Induction Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liontrust Asset and Induction Healthcare
The main advantage of trading using opposite Liontrust Asset and Induction Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liontrust Asset position performs unexpectedly, Induction Healthcare 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 Induction Healthcare will offset losses from the drop in Induction Healthcare's long position.| Liontrust Asset vs. Worldwide Healthcare Trust | Liontrust Asset vs. Vienna Insurance Group | Liontrust Asset vs. Omega Healthcare Investors | Liontrust Asset vs. Spire Healthcare 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |