Correlation Between Morningstar Unconstrained and Lion Group

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

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

Diversification Opportunities for Morningstar Unconstrained and Lion Group

-0.44

Correlation Coefficient

Morningstar Unconstrained  Lion Group

Very good diversification

The 3 months correlation between Morningstar and Lion is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Morningstar Unconstrained Allo and Lion Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Group Holding and Morningstar Unconstrained 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 Morningstar Unconstrained Allocation are associated (or correlated) with Lion Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Group Holding has no effect on the direction of Morningstar Unconstrained i.e., Morningstar Unconstrained and Lion Group go up and down completely randomly.

Pair Corralation between Morningstar Unconstrained and Lion Group

Assuming the 90 days horizon Morningstar Unconstrained Allocation is expected to generate 0.09 times more return on investment than Lion Group. However, Morningstar Unconstrained Allocation is 11.04 times less risky than Lion Group. It trades about 0.05 of its potential returns per unit of risk. Lion Group Holding is currently generating about -0.15 per unit of risk. If you would invest  1,043  in Morningstar Unconstrained Allocation on December 30, 2024 and sell it today you would earn a total of  23.00  from holding Morningstar Unconstrained Allocation or generate 2.21% return on investment over 90 days.

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

Morningstar Unconstrained Allo  vs.  Lion Group Holding

Morningstar Unconstrained

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Morningstar Unconstrained Allocation are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Morningstar Unconstrained is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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 weak performance in the last few months, the Stock's technical indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Morningstar Unconstrained and Lion Group

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

The idea behind Morningstar Unconstrained Allocation and Lion Group Holding 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.

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.