Correlation Between Liontrust Asset and International Consolidated

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

Diversification Opportunities for Liontrust Asset and International Consolidated

0.36

Correlation Coefficient

Liontrust Asset  International Consolidated

Weak diversification

The 3 months correlation between Liontrust and International is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Liontrust Asset Management and International Consolidated Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Consolidated 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 International Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Consolidated has no effect on the direction of Liontrust Asset i.e., Liontrust Asset and International Consolidated go up and down completely randomly.

Pair Corralation between Liontrust Asset and International Consolidated

Assuming the 90 days trading horizon Liontrust Asset Management is expected to under-perform the International Consolidated. In addition to that, Liontrust Asset is 1.28 times more volatile than International Consolidated Airlines. It trades about -0.05 of its total potential returns per unit of risk. International Consolidated Airlines is currently generating about 0.08 per unit of volatility. If you would invest  15,844  in International Consolidated Airlines on October 9, 2024 and sell it today you would earn a total of  13,816  from holding International Consolidated Airlines or generate 87.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.4%
Values	Daily Returns

Liontrust Asset Management  vs.  International Consolidated Air

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 newest stock price tumult, may contribute to shorter-term losses for the shareholders.

International Consolidated

Risk-Adjusted Performance

33 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in International Consolidated Airlines are ranked lower than 33 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, International Consolidated exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Liontrust Asset and International Consolidated

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

The idea behind Liontrust Asset Management and International Consolidated Airlines 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.