Correlation Between Lion Group and Aquagold International

Can any of the company-specific risk be diversified away by investing in both Lion Group and Aquagold International 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 Aquagold International 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 Aquagold International, you can compare the effects of market volatilities on Lion Group and Aquagold International 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 Aquagold International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Group and Aquagold International.

Diversification Opportunities for Lion Group and Aquagold International

0.27

Correlation Coefficient

Lion Group  Aquagold International

Modest diversification

The 3 months correlation between Lion and Aquagold is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Lion Group Holding and Aquagold International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquagold International 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 Aquagold International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquagold International has no effect on the direction of Lion Group i.e., Lion Group and Aquagold International go up and down completely randomly.

Pair Corralation between Lion Group and Aquagold International

Given the investment horizon of 90 days Lion Group Holding is expected to generate 0.61 times more return on investment than Aquagold International. However, Lion Group Holding is 1.65 times less risky than Aquagold International. It trades about -0.01 of its potential returns per unit of risk. Aquagold International is currently generating about -0.17 per unit of risk. If you would invest  20.00  in Lion Group Holding on November 29, 2024 and sell it today you would lose (4.00) from holding Lion Group Holding or give up 20.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.16%
Values	Daily Returns

Lion Group Holding  vs.  Aquagold International

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 quite persistent technical indicators, Lion Group is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Aquagold International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aquagold International 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 basic indicators remain fairly strong which may send shares a bit higher in March 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Lion Group and Aquagold International

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

The idea behind Lion Group Holding and Aquagold International 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.