Correlation Between Sancus Lending and Light Science

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

By analyzing existing cross correlation between Sancus Lending Group and Light Science Technologies, you can compare the effects of market volatilities on Sancus Lending and Light Science 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 Sancus Lending with a short position of Light Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sancus Lending and Light Science.

Diversification Opportunities for Sancus Lending and Light Science

0.35

Correlation Coefficient

Sancus Lending  Light Science

Weak diversification

The 3 months correlation between Sancus and Light is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sancus Lending Group and Light Science Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Light Science Techno and Sancus Lending 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 Sancus Lending Group are associated (or correlated) with Light Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Light Science Techno has no effect on the direction of Sancus Lending i.e., Sancus Lending and Light Science go up and down completely randomly.

Pair Corralation between Sancus Lending and Light Science

Assuming the 90 days trading horizon Sancus Lending is expected to generate 1.04 times less return on investment than Light Science. In addition to that, Sancus Lending is 1.48 times more volatile than Light Science Technologies. It trades about 0.01 of its total potential returns per unit of risk. Light Science Technologies is currently generating about 0.02 per unit of volatility. If you would invest  475.00  in Light Science Technologies on October 9, 2024 and sell it today you would lose (200.00) from holding Light Science Technologies or give up 42.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Sancus Lending Group  vs.  Light Science Technologies

Sancus Lending Group

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sancus Lending Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Sancus Lending may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Light Science Techno

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Light Science Technologies are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Light Science may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Sancus Lending and Light Science

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

The idea behind Sancus Lending Group and Light Science Technologies 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.