Correlation Between Lion Financial and Integrated Wellness

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

Diversification Opportunities for Lion Financial and Integrated Wellness

-0.45

Correlation Coefficient

Lion Financial  Integrated Wellness

Very good diversification

The 3 months correlation between Lion and Integrated is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Lion Financial Group and Integrated Wellness Acquisitio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Wellness 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 Integrated Wellness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Wellness has no effect on the direction of Lion Financial i.e., Lion Financial and Integrated Wellness go up and down completely randomly.

Pair Corralation between Lion Financial and Integrated Wellness

Assuming the 90 days horizon Lion Financial Group is expected to generate 21.25 times more return on investment than Integrated Wellness. However, Lion Financial is 21.25 times more volatile than Integrated Wellness Acquisition. It trades about 0.06 of its potential returns per unit of risk. Integrated Wellness Acquisition is currently generating about 0.05 per unit of risk. If you would invest  0.86  in Lion Financial Group on October 10, 2024 and sell it today you would earn a total of  0.09  from holding Lion Financial Group or generate 10.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	91.8%
Values	Daily Returns

Lion Financial Group  vs.  Integrated Wellness Acquisitio

Lion Financial Group

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lion Financial Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain essential indicators, Lion Financial showed solid returns over the last few months and may actually be approaching a breakup point.

Integrated Wellness

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Integrated Wellness Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Integrated Wellness is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Lion Financial and Integrated Wellness

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

The idea behind Lion Financial Group and Integrated Wellness Acquisition 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.