Correlation Between Lion Financial and SAIHEAT
Can any of the company-specific risk be diversified away by investing in both Lion Financial and SAIHEAT 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 Financial and SAIHEAT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion Financial Group and SAIHEAT Limited, you can compare the effects of market volatilities on Lion Financial and SAIHEAT 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 Financial with a short position of SAIHEAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Financial and SAIHEAT.
Diversification Opportunities for Lion Financial and SAIHEAT
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lion and SAIHEAT is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Lion Financial Group and SAIHEAT Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAIHEAT Limited and Lion Financial 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 Financial Group are associated (or correlated) with SAIHEAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAIHEAT Limited has no effect on the direction of Lion Financial i.e., Lion Financial and SAIHEAT go up and down completely randomly.
Pair Corralation between Lion Financial and SAIHEAT
Assuming the 90 days horizon Lion Financial is expected to generate 16.8 times less return on investment than SAIHEAT. But when comparing it to its historical volatility, Lion Financial Group is 5.71 times less risky than SAIHEAT. It trades about 0.08 of its potential returns per unit of risk. SAIHEAT Limited is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 4.21 in SAIHEAT Limited on August 23, 2024 and sell it today you would earn a total of 10.79 from holding SAIHEAT Limited or generate 256.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 50.0% |
| Values | Daily Returns |
Lion Financial Group vs. SAIHEAT Limited
Performance |
| Timeline |
| Lion Financial Group |
| SAIHEAT Limited |
Lion Financial and SAIHEAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion Financial and SAIHEAT
The main advantage of trading using opposite Lion Financial and SAIHEAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Financial position performs unexpectedly, SAIHEAT 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 SAIHEAT will offset losses from the drop in SAIHEAT's long position.The idea behind Lion Financial Group and SAIHEAT Limited 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.| SAIHEAT vs. Raymond James Financial | SAIHEAT vs. Lion Financial Group | SAIHEAT vs. The Charles Schwab | SAIHEAT vs. The Charles Schwab |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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