Correlation Between Liontrust Asset and Oxford Technology
Can any of the company-specific risk be diversified away by investing in both Liontrust Asset and Oxford Technology 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 Oxford Technology 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 Oxford Technology 2, you can compare the effects of market volatilities on Liontrust Asset and Oxford Technology 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 Oxford Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liontrust Asset and Oxford Technology.
Diversification Opportunities for Liontrust Asset and Oxford Technology
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Liontrust and Oxford is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Liontrust Asset Management and Oxford Technology 2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxford Technology 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 Oxford Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxford Technology has no effect on the direction of Liontrust Asset i.e., Liontrust Asset and Oxford Technology go up and down completely randomly.
Pair Corralation between Liontrust Asset and Oxford Technology
Assuming the 90 days trading horizon Liontrust Asset Management is expected to generate 1.19 times more return on investment than Oxford Technology. However, Liontrust Asset is 1.19 times more volatile than Oxford Technology 2. It trades about -0.04 of its potential returns per unit of risk. Oxford Technology 2 is currently generating about -0.12 per unit of risk. If you would invest 83,328 in Liontrust Asset Management on September 5, 2024 and sell it today you would lose (38,378) from holding Liontrust Asset Management or give up 46.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Liontrust Asset Management vs. Oxford Technology 2
Performance |
| Timeline |
| Liontrust Asset Mana |
| Oxford Technology |
Liontrust Asset and Oxford Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liontrust Asset and Oxford Technology
The main advantage of trading using opposite Liontrust Asset and Oxford Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liontrust Asset position performs unexpectedly, Oxford Technology 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 Oxford Technology will offset losses from the drop in Oxford Technology's long position.| Liontrust Asset vs. CNH Industrial NV | Liontrust Asset vs. Innovative Industrial Properties | Liontrust Asset vs. Gamma Communications PLC | Liontrust Asset vs. Aeorema Communications Plc |
| Oxford Technology vs. Samsung Electronics Co | Oxford Technology vs. Samsung Electronics Co | Oxford Technology vs. Hyundai Motor | Oxford Technology vs. Toyota Motor Corp |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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