Correlation Between Lion Financial and ToughBuilt Industries

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

By analyzing existing cross correlation between Lion Financial Group and ToughBuilt Industries WT, you can compare the effects of market volatilities on Lion Financial and ToughBuilt Industries 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 Financial with a short position of ToughBuilt Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Financial and ToughBuilt Industries.

Diversification Opportunities for Lion Financial and ToughBuilt Industries

0.0

Correlation Coefficient

Lion Financial  ToughBuilt Industries

Pay attention - limited upside

The 3 months correlation between Lion and ToughBuilt is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lion Financial Group and ToughBuilt Industries WT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ToughBuilt Industries and Lion Financial 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 Financial Group are associated (or correlated) with ToughBuilt Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ToughBuilt Industries has no effect on the direction of Lion Financial i.e., Lion Financial and ToughBuilt Industries go up and down completely randomly.

Pair Corralation between Lion Financial and ToughBuilt Industries

If you would invest (100.00) in ToughBuilt Industries WT on December 30, 2024 and sell it today you would earn a total of  100.00  from holding ToughBuilt Industries WT or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Lion Financial Group  vs.  ToughBuilt Industries WT

Lion Financial Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lion Financial Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, Lion Financial is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

ToughBuilt Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days ToughBuilt Industries WT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, ToughBuilt Industries is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Lion Financial and ToughBuilt Industries

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

The idea behind Lion Financial Group and ToughBuilt Industries WT 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.