Correlation Between Tatton Asset and LBG Media
Can any of the company-specific risk be diversified away by investing in both Tatton Asset and LBG Media 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 Tatton Asset and LBG Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tatton Asset Management and LBG Media PLC, you can compare the effects of market volatilities on Tatton Asset and LBG Media 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 Tatton Asset with a short position of LBG Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tatton Asset and LBG Media.
Diversification Opportunities for Tatton Asset and LBG Media
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tatton and LBG is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Tatton Asset Management and LBG Media PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LBG Media PLC and Tatton 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 Tatton Asset Management are associated (or correlated) with LBG Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LBG Media PLC has no effect on the direction of Tatton Asset i.e., Tatton Asset and LBG Media go up and down completely randomly.
Pair Corralation between Tatton Asset and LBG Media
Assuming the 90 days trading horizon Tatton Asset Management is expected to generate 0.55 times more return on investment than LBG Media. However, Tatton Asset Management is 1.81 times less risky than LBG Media. It trades about 0.15 of its potential returns per unit of risk. LBG Media PLC is currently generating about 0.04 per unit of risk. If you would invest 59,164 in Tatton Asset Management on April 25, 2025 and sell it today you would earn a total of 10,436 from holding Tatton Asset Management or generate 17.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Tatton Asset Management vs. LBG Media PLC
Performance |
Timeline |
Tatton Asset Management |
LBG Media PLC |
Tatton Asset and LBG Media Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tatton Asset and LBG Media
The main advantage of trading using opposite Tatton Asset and LBG Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tatton Asset position performs unexpectedly, LBG Media 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 LBG Media will offset losses from the drop in LBG Media's long position.Tatton Asset vs. Amazon Inc | Tatton Asset vs. Compass Group PLC | Tatton Asset vs. SANTANDER UK 10 | Tatton Asset vs. Coor Service Management |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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