Correlation Between Hut 8 and Lion Group
Can any of the company-specific risk be diversified away by investing in both Hut 8 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 Hut 8 and Lion Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hut 8 Corp and Lion Group Holding, you can compare the effects of market volatilities on Hut 8 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 Hut 8 with a short position of Lion Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hut 8 and Lion Group.
Diversification Opportunities for Hut 8 and Lion Group
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hut and Lion is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Hut 8 Corp 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 Hut 8 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 Hut 8 Corp 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 Hut 8 i.e., Hut 8 and Lion Group go up and down completely randomly.
Pair Corralation between Hut 8 and Lion Group
Considering the 90-day investment horizon Hut 8 Corp is expected to generate 1.51 times more return on investment than Lion Group. However, Hut 8 is 1.51 times more volatile than Lion Group Holding. It trades about 0.34 of its potential returns per unit of risk. Lion Group Holding is currently generating about -0.02 per unit of risk. If you would invest 1,556 in Hut 8 Corp on September 4, 2024 and sell it today you would earn a total of 1,037 from holding Hut 8 Corp or generate 66.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hut 8 Corp vs. Lion Group Holding
Performance |
| Timeline |
| Hut 8 Corp |
| Lion Group Holding |
Hut 8 and Lion Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hut 8 and Lion Group
The main advantage of trading using opposite Hut 8 and Lion Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hut 8 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 Hut 8 Corp 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.| Lion Group vs. Magic Empire Global | Lion Group vs. Netcapital | Lion Group vs. Mercurity Fintech Holding | Lion Group vs. Applied Blockchain |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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