Correlation Between J Sainsbury and Liontrust Asset
Can any of the company-specific risk be diversified away by investing in both J Sainsbury and Liontrust Asset 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 J Sainsbury and Liontrust Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between J Sainsbury PLC and Liontrust Asset Management, you can compare the effects of market volatilities on J Sainsbury and Liontrust Asset 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 J Sainsbury with a short position of Liontrust Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Sainsbury and Liontrust Asset.
Diversification Opportunities for J Sainsbury and Liontrust Asset
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SBRY and Liontrust is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding J Sainsbury PLC and Liontrust Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liontrust Asset Mana and J Sainsbury 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 J Sainsbury PLC are associated (or correlated) with Liontrust Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liontrust Asset Mana has no effect on the direction of J Sainsbury i.e., J Sainsbury and Liontrust Asset go up and down completely randomly.
Pair Corralation between J Sainsbury and Liontrust Asset
Assuming the 90 days trading horizon J Sainsbury PLC is expected to generate 0.56 times more return on investment than Liontrust Asset. However, J Sainsbury PLC is 1.77 times less risky than Liontrust Asset. It trades about 0.05 of its potential returns per unit of risk. Liontrust Asset Management is currently generating about -0.04 per unit of risk. If you would invest 20,069 in J Sainsbury PLC on September 2, 2024 and sell it today you would earn a total of 6,051 from holding J Sainsbury PLC or generate 30.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
J Sainsbury PLC vs. Liontrust Asset Management
Performance |
| Timeline |
| J Sainsbury PLC |
| Liontrust Asset Mana |
J Sainsbury and Liontrust Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J Sainsbury and Liontrust Asset
The main advantage of trading using opposite J Sainsbury and Liontrust Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Sainsbury position performs unexpectedly, Liontrust Asset 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 Liontrust Asset will offset losses from the drop in Liontrust Asset's long position.| J Sainsbury vs. Liontrust Asset Management | J Sainsbury vs. Medical Properties Trust | J Sainsbury vs. Uber Technologies | J Sainsbury vs. Coor Service Management |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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