Correlation Between Liontrust Asset and J Sainsbury
Can any of the company-specific risk be diversified away by investing in both Liontrust Asset and J Sainsbury 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 J Sainsbury 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 J Sainsbury PLC, you can compare the effects of market volatilities on Liontrust Asset and J Sainsbury 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 J Sainsbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liontrust Asset and J Sainsbury.
Diversification Opportunities for Liontrust Asset and J Sainsbury
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Liontrust and SBRY is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Liontrust Asset Management and J Sainsbury PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Sainsbury PLC 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 J Sainsbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Sainsbury PLC has no effect on the direction of Liontrust Asset i.e., Liontrust Asset and J Sainsbury go up and down completely randomly.
Pair Corralation between Liontrust Asset and J Sainsbury
Assuming the 90 days trading horizon Liontrust Asset Management is expected to generate 1.65 times more return on investment than J Sainsbury. However, Liontrust Asset is 1.65 times more volatile than J Sainsbury PLC. It trades about 0.0 of its potential returns per unit of risk. J Sainsbury PLC is currently generating about -0.01 per unit of risk. If you would invest 47,137 in Liontrust Asset Management on September 3, 2024 and sell it today you would lose (2,987) from holding Liontrust Asset Management or give up 6.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liontrust Asset Management vs. J Sainsbury PLC
Performance |
| Timeline |
| Liontrust Asset Mana |
| J Sainsbury PLC |
Liontrust Asset and J Sainsbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liontrust Asset and J Sainsbury
The main advantage of trading using opposite Liontrust Asset and J Sainsbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liontrust Asset position performs unexpectedly, J Sainsbury 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 J Sainsbury will offset losses from the drop in J Sainsbury's long position.| Liontrust Asset vs. MT Bank Corp | Liontrust Asset vs. JD Sports Fashion | Liontrust Asset vs. UNIQA Insurance Group | Liontrust Asset vs. Sparebank 1 SR |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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