Correlation Between LEO Token and AUC

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

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

Diversification Opportunities for LEO Token and AUC

0.02

Correlation Coefficient

LEO Token  AUC

Significant diversification

The 3 months correlation between LEO and AUC is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding LEO Token and AUC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUC and LEO Token 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 LEO Token are associated (or correlated) with AUC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUC has no effect on the direction of LEO Token i.e., LEO Token and AUC go up and down completely randomly.

Pair Corralation between LEO Token and AUC

Assuming the 90 days trading horizon LEO Token is expected to generate 0.5 times more return on investment than AUC. However, LEO Token is 2.01 times less risky than AUC. It trades about 0.11 of its potential returns per unit of risk. AUC is currently generating about -0.03 per unit of risk. If you would invest  907.00  in LEO Token on December 28, 2024 and sell it today you would earn a total of  73.00  from holding LEO Token or generate 8.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

LEO Token  vs.  AUC

LEO Token

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in LEO Token are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, LEO Token may actually be approaching a critical reversion point that can send shares even higher in April 2025.

AUC

Risk-Adjusted Performance

Very Weak

Over the last 90 days AUC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, AUC is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with LEO Token and AUC

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

The idea behind LEO Token and AUC 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.