Correlation Between Leverage Shares and Sancus Lending
Can any of the company-specific risk be diversified away by investing in both Leverage Shares and Sancus Lending 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 Leverage Shares and Sancus Lending into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leverage Shares 2x and Sancus Lending Group, you can compare the effects of market volatilities on Leverage Shares and Sancus Lending 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 Leverage Shares with a short position of Sancus Lending. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leverage Shares and Sancus Lending.
Diversification Opportunities for Leverage Shares and Sancus Lending
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Leverage and Sancus is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Leverage Shares 2x and Sancus Lending Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sancus Lending Group and Leverage Shares 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 Leverage Shares 2x are associated (or correlated) with Sancus Lending. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sancus Lending Group has no effect on the direction of Leverage Shares i.e., Leverage Shares and Sancus Lending go up and down completely randomly.
Pair Corralation between Leverage Shares and Sancus Lending
Assuming the 90 days trading horizon Leverage Shares 2x is expected to generate 0.33 times more return on investment than Sancus Lending. However, Leverage Shares 2x is 3.05 times less risky than Sancus Lending. It trades about 0.02 of its potential returns per unit of risk. Sancus Lending Group is currently generating about -0.14 per unit of risk. If you would invest 4,986 in Leverage Shares 2x on August 30, 2024 and sell it today you would earn a total of 33.00 from holding Leverage Shares 2x or generate 0.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.73% |
| Values | Daily Returns |
Leverage Shares 2x vs. Sancus Lending Group
Performance |
| Timeline |
| Leverage Shares 2x |
| Sancus Lending Group |
Leverage Shares and Sancus Lending Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leverage Shares and Sancus Lending
The main advantage of trading using opposite Leverage Shares and Sancus Lending positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leverage Shares position performs unexpectedly, Sancus Lending 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 Sancus Lending will offset losses from the drop in Sancus Lending's long position.| Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x |
| Sancus Lending vs. Southwest Airlines Co | Sancus Lending vs. Everyman Media Group | Sancus Lending vs. Infrastrutture Wireless Italiane | Sancus Lending vs. Prosiebensat 1 Media |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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