Correlation Between Able View and Lendway

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

By analyzing existing cross correlation between Able View Global and Lendway, you can compare the effects of market volatilities on Able View and Lendway 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 Able View with a short position of Lendway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Able View and Lendway.

Diversification Opportunities for Able View and Lendway

0.09

Correlation Coefficient

Able View  Lendway

Significant diversification

The 3 months correlation between Able and Lendway is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Able View Global and Lendway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendway and Able View 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 Able View Global are associated (or correlated) with Lendway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendway has no effect on the direction of Able View i.e., Able View and Lendway go up and down completely randomly.

Pair Corralation between Able View and Lendway

Assuming the 90 days horizon Able View Global is expected to generate 12.62 times more return on investment than Lendway. However, Able View is 12.62 times more volatile than Lendway. It trades about 0.16 of its potential returns per unit of risk. Lendway is currently generating about -0.14 per unit of risk. If you would invest  1.89  in Able View Global on December 28, 2024 and sell it today you would earn a total of  0.31  from holding Able View Global or generate 16.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	50.0%
Values	Daily Returns

Able View Global  vs.  Lendway

Able View Global

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Able View Global are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Able View showed solid returns over the last few months and may actually be approaching a breakup point.

Lendway

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lendway has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Able View and Lendway

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

The idea behind Able View Global and Lendway 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.