Correlation Between Liontrust Asset and Givaudan

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

Diversification Opportunities for Liontrust Asset and Givaudan

-0.19

Correlation Coefficient

Liontrust Asset  Givaudan

Good diversification

The 3 months correlation between Liontrust and Givaudan is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Liontrust Asset Management and Givaudan SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Givaudan SA 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 Givaudan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Givaudan SA has no effect on the direction of Liontrust Asset i.e., Liontrust Asset and Givaudan go up and down completely randomly.

Pair Corralation between Liontrust Asset and Givaudan

Assuming the 90 days trading horizon Liontrust Asset Management is expected to under-perform the Givaudan. In addition to that, Liontrust Asset is 1.74 times more volatile than Givaudan SA. It trades about -0.08 of its total potential returns per unit of risk. Givaudan SA is currently generating about -0.05 per unit of volatility. If you would invest  397,712  in Givaudan SA on December 26, 2024 and sell it today you would lose (19,162) from holding Givaudan SA or give up 4.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Liontrust Asset Management  vs.  Givaudan SA

Liontrust Asset Mana

Risk-Adjusted Performance

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 conflicting 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.

Givaudan SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Givaudan SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Givaudan 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 Givaudan

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

The idea behind Liontrust Asset Management and Givaudan SA 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.

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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.