Correlation Between Lion Group and BlockQuarry Corp

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

Diversification Opportunities for Lion Group and BlockQuarry Corp

-0.27

Correlation Coefficient

Lion Group  BlockQuarry Corp

Very good diversification

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

Pair Corralation between Lion Group and BlockQuarry Corp

Given the investment horizon of 90 days Lion Group Holding is expected to under-perform the BlockQuarry Corp. But the stock apears to be less risky and, when comparing its historical volatility, Lion Group Holding is 1.64 times less risky than BlockQuarry Corp. The stock trades about -0.12 of its potential returns per unit of risk. The BlockQuarry Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  17.00  in BlockQuarry Corp on September 3, 2024 and sell it today you would lose (11.00) from holding BlockQuarry Corp or give up 64.71% of portfolio value over 90 days.

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

Lion Group Holding  vs.  BlockQuarry Corp

Lion Group Holding

Risk-Adjusted Performance

0 of 100

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 newest stock price mess, may contribute to short-term losses for the institutional investors.

BlockQuarry Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BlockQuarry Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, BlockQuarry Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lion Group and BlockQuarry Corp

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

The idea behind Lion Group Holding and BlockQuarry Corp 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..