Correlation Between Liontrust Asset and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both Liontrust Asset and McEwen Mining 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 McEwen Mining 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 McEwen Mining, you can compare the effects of market volatilities on Liontrust Asset and McEwen Mining 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 McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liontrust Asset and McEwen Mining.
Diversification Opportunities for Liontrust Asset and McEwen Mining
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Liontrust and McEwen is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Liontrust Asset Management and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining 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 McEwen Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McEwen Mining has no effect on the direction of Liontrust Asset i.e., Liontrust Asset and McEwen Mining go up and down completely randomly.
Pair Corralation between Liontrust Asset and McEwen Mining
Assuming the 90 days trading horizon Liontrust Asset Management is expected to generate 0.47 times more return on investment than McEwen Mining. However, Liontrust Asset Management is 2.13 times less risky than McEwen Mining. It trades about 0.05 of its potential returns per unit of risk. McEwen Mining is currently generating about -0.02 per unit of risk. If you would invest 44,962 in Liontrust Asset Management on September 25, 2024 and sell it today you would earn a total of 738.00 from holding Liontrust Asset Management or generate 1.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Liontrust Asset Management vs. McEwen Mining
Performance |
Timeline |
Liontrust Asset Mana |
McEwen Mining |
Liontrust Asset and McEwen Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Liontrust Asset and McEwen Mining
The main advantage of trading using opposite Liontrust Asset and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liontrust Asset position performs unexpectedly, McEwen Mining 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 McEwen Mining will offset losses from the drop in McEwen Mining's long position.Liontrust Asset vs. Cembra Money Bank | Liontrust Asset vs. CleanTech Lithium plc | Liontrust Asset vs. AfriTin Mining | Liontrust Asset vs. OneSavings Bank PLC |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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