Correlation Between Lion Group and 70082LAB3

Can any of the company-specific risk be diversified away by investing in both Lion Group and 70082LAB3 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 Lion Group and 70082LAB3 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lion Group Holding and US70082LAB36, you can compare the effects of market volatilities on Lion Group and 70082LAB3 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 Lion Group with a short position of 70082LAB3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Group and 70082LAB3.

Diversification Opportunities for Lion Group and 70082LAB3

0.71

Correlation Coefficient

Lion Group  70082LAB3

Poor diversification

The 3 months correlation between Lion and 70082LAB3 is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Lion Group Holding and US70082LAB36 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US70082LAB36 and Lion Group 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 Lion Group Holding are associated (or correlated) with 70082LAB3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US70082LAB36 has no effect on the direction of Lion Group i.e., Lion Group and 70082LAB3 go up and down completely randomly.

Pair Corralation between Lion Group and 70082LAB3

Given the investment horizon of 90 days Lion Group Holding is expected to under-perform the 70082LAB3. In addition to that, Lion Group is 1.49 times more volatile than US70082LAB36. It trades about -0.23 of its total potential returns per unit of risk. US70082LAB36 is currently generating about 0.0 per unit of volatility. If you would invest  8,794  in US70082LAB36 on January 3, 2025 and sell it today you would lose (344.00) from holding US70082LAB36 or give up 3.91% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	60.66%
Values	Daily Returns

Lion Group Holding  vs.  US70082LAB36

Lion Group Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lion Group Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical indicators remain quite persistent which may send shares a bit higher in May 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

US70082LAB36

Risk-Adjusted Performance

Very Weak

Over the last 90 days US70082LAB36 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 70082LAB3 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lion Group and 70082LAB3

The main advantage of trading using opposite Lion Group and 70082LAB3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Group position performs unexpectedly, 70082LAB3 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 70082LAB3 will offset losses from the drop in 70082LAB3's long position.

The idea behind Lion Group Holding and US70082LAB36 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.