Correlation Between YHN Acquisition and Lionheart Holdings
Can any of the company-specific risk be diversified away by investing in both YHN Acquisition and Lionheart Holdings 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 YHN Acquisition and Lionheart Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YHN Acquisition I and Lionheart Holdings, you can compare the effects of market volatilities on YHN Acquisition and Lionheart Holdings 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 YHN Acquisition with a short position of Lionheart Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of YHN Acquisition and Lionheart Holdings.
Diversification Opportunities for YHN Acquisition and Lionheart Holdings
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between YHN and Lionheart is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding YHN Acquisition I and Lionheart Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lionheart Holdings and YHN Acquisition 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 YHN Acquisition I are associated (or correlated) with Lionheart Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lionheart Holdings has no effect on the direction of YHN Acquisition i.e., YHN Acquisition and Lionheart Holdings go up and down completely randomly.
Pair Corralation between YHN Acquisition and Lionheart Holdings
Assuming the 90 days horizon YHN Acquisition I is expected to generate 10.62 times more return on investment than Lionheart Holdings. However, YHN Acquisition is 10.62 times more volatile than Lionheart Holdings. It trades about 0.04 of its potential returns per unit of risk. Lionheart Holdings is currently generating about 0.13 per unit of risk. If you would invest 1,000.00 in YHN Acquisition I on November 3, 2024 and sell it today you would earn a total of 39.18 from holding YHN Acquisition I or generate 3.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 81.67% |
| Values | Daily Returns |
YHN Acquisition I vs. Lionheart Holdings
Performance |
| Timeline |
| YHN Acquisition I |
| Lionheart Holdings |
YHN Acquisition and Lionheart Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YHN Acquisition and Lionheart Holdings
The main advantage of trading using opposite YHN Acquisition and Lionheart Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YHN Acquisition position performs unexpectedly, Lionheart Holdings 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 Lionheart Holdings will offset losses from the drop in Lionheart Holdings' long position.| YHN Acquisition vs. AKITA Drilling | YHN Acquisition vs. Tenaris SA ADR | YHN Acquisition vs. Seadrill Limited | YHN Acquisition vs. Orbit Garant Drilling |
| Lionheart Holdings vs. Direct Line Insurance | Lionheart Holdings vs. RCI Hospitality Holdings | Lionheart Holdings vs. Palomar Holdings | Lionheart Holdings vs. Cheche Group Class |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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