Correlation Between Liontrust Asset and MoneysupermarketCom

Can any of the company-specific risk be diversified away by investing in both Liontrust Asset and MoneysupermarketCom 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 MoneysupermarketCom 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 MoneysupermarketCom Group PLC, you can compare the effects of market volatilities on Liontrust Asset and MoneysupermarketCom 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 MoneysupermarketCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liontrust Asset and MoneysupermarketCom.

Diversification Opportunities for Liontrust Asset and MoneysupermarketCom

0.81

Correlation Coefficient

Liontrust Asset  MoneysupermarketCom

Very poor diversification

The 3 months correlation between Liontrust and MoneysupermarketCom is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Liontrust Asset Management and MoneysupermarketCom Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MoneysupermarketCom 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 MoneysupermarketCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MoneysupermarketCom has no effect on the direction of Liontrust Asset i.e., Liontrust Asset and MoneysupermarketCom go up and down completely randomly.

Pair Corralation between Liontrust Asset and MoneysupermarketCom

Assuming the 90 days trading horizon Liontrust Asset Management is expected to under-perform the MoneysupermarketCom. In addition to that, Liontrust Asset is 1.63 times more volatile than MoneysupermarketCom Group PLC. It trades about -0.05 of its total potential returns per unit of risk. MoneysupermarketCom Group PLC is currently generating about -0.03 per unit of volatility. If you would invest  20,320  in MoneysupermarketCom Group PLC on September 12, 2024 and sell it today you would lose (730.00) from holding MoneysupermarketCom Group PLC or give up 3.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Liontrust Asset Management  vs.  MoneysupermarketCom Group PLC

Liontrust Asset Mana

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Liontrust Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

MoneysupermarketCom

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MoneysupermarketCom Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, MoneysupermarketCom is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Liontrust Asset and MoneysupermarketCom

The main advantage of trading using opposite Liontrust Asset and MoneysupermarketCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liontrust Asset position performs unexpectedly, MoneysupermarketCom 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 MoneysupermarketCom will offset losses from the drop in MoneysupermarketCom's long position.

The idea behind Liontrust Asset Management and MoneysupermarketCom Group PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.