Correlation Between Lion Group and Zhong Yang
Can any of the company-specific risk be diversified away by investing in both Lion Group and Zhong Yang 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 Group and Zhong Yang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion Group Holding and Zhong Yang Financial, you can compare the effects of market volatilities on Lion Group and Zhong Yang 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 Group with a short position of Zhong Yang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Group and Zhong Yang.
Diversification Opportunities for Lion Group and Zhong Yang
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lion and Zhong is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Lion Group Holding and Zhong Yang Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhong Yang Financial and Lion Group 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 Group Holding are associated (or correlated) with Zhong Yang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhong Yang Financial has no effect on the direction of Lion Group i.e., Lion Group and Zhong Yang go up and down completely randomly.
Pair Corralation between Lion Group and Zhong Yang
Given the investment horizon of 90 days Lion Group Holding is expected to under-perform the Zhong Yang. But the stock apears to be less risky and, when comparing its historical volatility, Lion Group Holding is 1.27 times less risky than Zhong Yang. The stock trades about -0.09 of its potential returns per unit of risk. The Zhong Yang Financial is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 415.00 in Zhong Yang Financial on September 2, 2024 and sell it today you would lose (248.00) from holding Zhong Yang Financial or give up 59.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion Group Holding vs. Zhong Yang Financial
Performance |
| Timeline |
| Lion Group Holding |
| Zhong Yang Financial |
Lion Group and Zhong Yang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion Group and Zhong Yang
The main advantage of trading using opposite Lion Group and Zhong Yang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Group position performs unexpectedly, Zhong Yang 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 Zhong Yang will offset losses from the drop in Zhong Yang's long position.| Lion Group vs. Magic Empire Global | Lion Group vs. Netcapital | Lion Group vs. Mercurity Fintech Holding | Lion Group vs. Applied Blockchain |
| Zhong Yang vs. Netcapital | Zhong Yang vs. Applied Blockchain | Zhong Yang vs. Magic Empire Global | Zhong Yang vs. Lazard |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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