Correlation Between St Galler and Liontrust Asset

Can any of the company-specific risk be diversified away by investing in both St Galler 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 St Galler and Liontrust Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between St Galler Kantonalbank and Liontrust Asset Management, you can compare the effects of market volatilities on St Galler 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 St Galler with a short position of Liontrust Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of St Galler and Liontrust Asset.

Diversification Opportunities for St Galler and Liontrust Asset

0.05

Correlation Coefficient

St Galler  Liontrust Asset

Significant diversification

The 3 months correlation between 0QQZ and Liontrust is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding St Galler Kantonalbank 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 St Galler 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 St Galler Kantonalbank 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 St Galler i.e., St Galler and Liontrust Asset go up and down completely randomly.

Pair Corralation between St Galler and Liontrust Asset

Assuming the 90 days trading horizon St Galler is expected to generate 1.99 times less return on investment than Liontrust Asset. But when comparing it to its historical volatility, St Galler Kantonalbank is 2.39 times less risky than Liontrust Asset. It trades about 0.1 of its potential returns per unit of risk. Liontrust Asset Management is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  45,750  in Liontrust Asset Management on October 6, 2024 and sell it today you would earn a total of  1,250  from holding Liontrust Asset Management or generate 2.73% return on investment over 90 days.

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

St Galler Kantonalbank  vs.  Liontrust Asset Management

St Galler Kantonalbank

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in St Galler Kantonalbank are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, St Galler may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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 rather sound technical and fundamental indicators, Liontrust Asset is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with St Galler and Liontrust Asset

The main advantage of trading using opposite St Galler and Liontrust Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if St Galler 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.

The idea behind St Galler Kantonalbank and Liontrust Asset Management 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.