Correlation Between SupplyMe Capital and Liontrust Asset
Can any of the company-specific risk be diversified away by investing in both SupplyMe Capital 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 SupplyMe Capital and Liontrust Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SupplyMe Capital PLC and Liontrust Asset Management, you can compare the effects of market volatilities on SupplyMe Capital 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 SupplyMe Capital with a short position of Liontrust Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of SupplyMe Capital and Liontrust Asset.
Diversification Opportunities for SupplyMe Capital and Liontrust Asset
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SupplyMe and Liontrust is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding SupplyMe Capital 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 SupplyMe Capital 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 SupplyMe Capital 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 SupplyMe Capital i.e., SupplyMe Capital and Liontrust Asset go up and down completely randomly.
Pair Corralation between SupplyMe Capital and Liontrust Asset
Assuming the 90 days trading horizon SupplyMe Capital PLC is expected to generate 4.75 times more return on investment than Liontrust Asset. However, SupplyMe Capital is 4.75 times more volatile than Liontrust Asset Management. It trades about 0.06 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 0.30 in SupplyMe Capital PLC on September 5, 2024 and sell it today you would earn a total of 0.00 from holding SupplyMe Capital PLC or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SupplyMe Capital PLC vs. Liontrust Asset Management
Performance |
| Timeline |
| SupplyMe Capital PLC |
| Liontrust Asset Mana |
SupplyMe Capital and Liontrust Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SupplyMe Capital and Liontrust Asset
The main advantage of trading using opposite SupplyMe Capital and Liontrust Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SupplyMe Capital 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.| SupplyMe Capital vs. Gaztransport et Technigaz | SupplyMe Capital vs. mobilezone holding AG | SupplyMe Capital vs. Trainline Plc | SupplyMe Capital vs. EVS Broadcast Equipment |
| Liontrust Asset vs. CNH Industrial NV | Liontrust Asset vs. Innovative Industrial Properties | Liontrust Asset vs. Gamma Communications PLC | Liontrust Asset vs. Aeorema Communications Plc |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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