Correlation Between Spire Healthcare and Liontrust Asset
Can any of the company-specific risk be diversified away by investing in both Spire Healthcare 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 Spire Healthcare and Liontrust Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spire Healthcare Group and Liontrust Asset Management, you can compare the effects of market volatilities on Spire Healthcare 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 Spire Healthcare with a short position of Liontrust Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire Healthcare and Liontrust Asset.
Diversification Opportunities for Spire Healthcare and Liontrust Asset
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Spire and Liontrust is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Spire Healthcare Group 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 Spire Healthcare 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 Spire Healthcare Group 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 Spire Healthcare i.e., Spire Healthcare and Liontrust Asset go up and down completely randomly.
Pair Corralation between Spire Healthcare and Liontrust Asset
Assuming the 90 days trading horizon Spire Healthcare is expected to generate 3.47 times less return on investment than Liontrust Asset. But when comparing it to its historical volatility, Spire Healthcare Group is 2.32 times less risky than Liontrust Asset. It trades about 0.18 of its potential returns per unit of risk. Liontrust Asset Management is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 39,675 in Liontrust Asset Management on September 21, 2024 and sell it today you would earn a total of 5,925 from holding Liontrust Asset Management or generate 14.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spire Healthcare Group vs. Liontrust Asset Management
Performance |
| Timeline |
| Spire Healthcare |
| Liontrust Asset Mana |
Spire Healthcare and Liontrust Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spire Healthcare and Liontrust Asset
The main advantage of trading using opposite Spire Healthcare and Liontrust Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spire Healthcare 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.| Spire Healthcare vs. SupplyMe Capital PLC | Spire Healthcare vs. Lloyds Banking Group | Spire Healthcare vs. Premier African Minerals | Spire Healthcare vs. SANTANDER UK 8 |
| Liontrust Asset vs. Catalyst Media Group | Liontrust Asset vs. CATLIN GROUP | Liontrust Asset vs. Tamburi Investment Partners | Liontrust Asset vs. Magnora ASA |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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