Correlation Between Evercore Partners and Lion Financial

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

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

Diversification Opportunities for Evercore Partners and Lion Financial

0.56

Correlation Coefficient

Evercore Partners  Lion Financial

Very weak diversification

The 3 months correlation between Evercore and Lion is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Evercore Partners and Lion Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Financial Group and Evercore Partners 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 Evercore Partners are associated (or correlated) with Lion Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Financial Group has no effect on the direction of Evercore Partners i.e., Evercore Partners and Lion Financial go up and down completely randomly.

Pair Corralation between Evercore Partners and Lion Financial

Considering the 90-day investment horizon Evercore Partners is expected to under-perform the Lion Financial. But the stock apears to be less risky and, when comparing its historical volatility, Evercore Partners is 2.85 times less risky than Lion Financial. The stock trades about -0.2 of its potential returns per unit of risk. The Lion Financial Group is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  0.73  in Lion Financial Group on December 20, 2024 and sell it today you would lose (0.10) from holding Lion Financial Group or give up 13.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Evercore Partners  vs.  Lion Financial Group

Evercore Partners

Risk-Adjusted Performance

Very Weak

Over the last 90 days Evercore Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Lion Financial Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lion Financial Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, Lion Financial is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Evercore Partners and Lion Financial

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

The idea behind Evercore Partners and Lion Financial Group 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.