Correlation Between Piper Sandler and Lion Financial

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

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

Diversification Opportunities for Piper Sandler and Lion Financial

-0.16

Correlation Coefficient

Piper Sandler  Lion Financial

Good diversification

The 3 months correlation between Piper and Lion is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Piper Sandler Companies and Lion Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Financial Group and Piper Sandler 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 Piper Sandler Companies are associated (or correlated) with Lion Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Financial Group has no effect on the direction of Piper Sandler i.e., Piper Sandler and Lion Financial go up and down completely randomly.

Pair Corralation between Piper Sandler and Lion Financial

Given the investment horizon of 90 days Piper Sandler Companies is expected to generate 0.35 times more return on investment than Lion Financial. However, Piper Sandler Companies is 2.84 times less risky than Lion Financial. It trades about 0.04 of its potential returns per unit of risk. Lion Financial Group is currently generating about 0.0 per unit of risk. If you would invest  28,629  in Piper Sandler Companies on October 7, 2024 and sell it today you would earn a total of  1,514  from holding Piper Sandler Companies or generate 5.29% return on investment over 90 days.

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

Piper Sandler Companies  vs.  Lion Financial Group

Piper Sandler Companies

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Piper Sandler Companies are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Piper Sandler may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Lion Financial Group

Risk-Adjusted Performance

0 of 100

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 newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Piper Sandler and Lion Financial

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

The idea behind Piper Sandler Companies and Lion Financial Group 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.