Correlation Between Liontrust Asset and Teradata Corp

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

Diversification Opportunities for Liontrust Asset and Teradata Corp

0.41

Correlation Coefficient

Liontrust Asset  Teradata Corp

Very weak diversification

The 3 months correlation between Liontrust and Teradata is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Liontrust Asset Management and Teradata Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teradata Corp 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 Teradata Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teradata Corp has no effect on the direction of Liontrust Asset i.e., Liontrust Asset and Teradata Corp go up and down completely randomly.

Pair Corralation between Liontrust Asset and Teradata Corp

Assuming the 90 days trading horizon Liontrust Asset Management is expected to under-perform the Teradata Corp. In addition to that, Liontrust Asset is 1.06 times more volatile than Teradata Corp. It trades about -0.06 of its total potential returns per unit of risk. Teradata Corp is currently generating about -0.02 per unit of volatility. If you would invest  3,195  in Teradata Corp on October 23, 2024 and sell it today you would lose (136.00) from holding Teradata Corp or give up 4.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	91.8%
Values	Daily Returns

Liontrust Asset Management  vs.  Teradata Corp

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 unsteady 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.

Teradata Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Liontrust Asset and Teradata Corp

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

The idea behind Liontrust Asset Management and Teradata Corp 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.