Correlation Between One Media and Liontrust Asset

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

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

Diversification Opportunities for One Media and Liontrust Asset

-0.05

Correlation Coefficient

One Media  Liontrust Asset

Good diversification

The 3 months correlation between One and Liontrust is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding One Media iP 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 One Media 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 One Media iP 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 One Media i.e., One Media and Liontrust Asset go up and down completely randomly.

Pair Corralation between One Media and Liontrust Asset

Assuming the 90 days trading horizon One Media iP is expected to under-perform the Liontrust Asset. In addition to that, One Media is 1.29 times more volatile than Liontrust Asset Management. It trades about -0.04 of its total potential returns per unit of risk. Liontrust Asset Management is currently generating about -0.04 per unit of volatility. If you would invest  44,050  in Liontrust Asset Management on November 29, 2024 and sell it today you would lose (800.00) from holding Liontrust Asset Management or give up 1.82% of portfolio value over 90 days.

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

One Media iP  vs.  Liontrust Asset Management

One Media iP

Risk-Adjusted Performance

Very Weak

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

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 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.

Pair Trading with One Media and Liontrust Asset

The main advantage of trading using opposite One Media and Liontrust Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if One Media 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 One Media iP 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.