Correlation Between Lion Group and Riot Blockchain
Can any of the company-specific risk be diversified away by investing in both Lion Group and Riot Blockchain 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 Riot Blockchain 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 Riot Blockchain, you can compare the effects of market volatilities on Lion Group and Riot Blockchain 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 Riot Blockchain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Group and Riot Blockchain.
Diversification Opportunities for Lion Group and Riot Blockchain
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lion and Riot is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Lion Group Holding and Riot Blockchain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Riot Blockchain 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 Riot Blockchain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Riot Blockchain has no effect on the direction of Lion Group i.e., Lion Group and Riot Blockchain go up and down completely randomly.
Pair Corralation between Lion Group and Riot Blockchain
Given the investment horizon of 90 days Lion Group Holding is expected to under-perform the Riot Blockchain. In addition to that, Lion Group is 1.45 times more volatile than Riot Blockchain. It trades about -0.11 of its total potential returns per unit of risk. Riot Blockchain is currently generating about -0.07 per unit of volatility. If you would invest 1,099 in Riot Blockchain on December 27, 2024 and sell it today you would lose (309.00) from holding Riot Blockchain or give up 28.12% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Lion Group Holding vs. Riot Blockchain
Performance |
Timeline |
Lion Group Holding |
Riot Blockchain |
Lion Group and Riot Blockchain Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lion Group and Riot Blockchain
The main advantage of trading using opposite Lion Group and Riot Blockchain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Group position performs unexpectedly, Riot Blockchain 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 Riot Blockchain will offset losses from the drop in Riot Blockchain's long position.Lion Group vs. Magic Empire Global | Lion Group vs. Netcapital | Lion Group vs. Mercurity Fintech Holding | Lion Group vs. Applied Digital |
Riot Blockchain vs. Hut 8 Corp | Riot Blockchain vs. CleanSpark | Riot Blockchain vs. Bit Digital | Riot Blockchain vs. Bitfarms |
Check out your portfolio center.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 Stocks Directory module to find actively traded stocks across global markets.
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