Correlation Between Lion Financial and Artelo Biosciences

Can any of the company-specific risk be diversified away by investing in both Lion Financial and Artelo Biosciences 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 Artelo Biosciences 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 Artelo Biosciences, you can compare the effects of market volatilities on Lion Financial and Artelo Biosciences 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 Artelo Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Financial and Artelo Biosciences.

Diversification Opportunities for Lion Financial and Artelo Biosciences

-0.1

Correlation Coefficient

Lion Financial  Artelo Biosciences

Good diversification

The 3 months correlation between Lion and Artelo is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Lion Financial Group and Artelo Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artelo Biosciences 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 Artelo Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artelo Biosciences has no effect on the direction of Lion Financial i.e., Lion Financial and Artelo Biosciences go up and down completely randomly.

Pair Corralation between Lion Financial and Artelo Biosciences

If you would invest  0.70  in Lion Financial Group on September 3, 2024 and sell it today you would earn a total of  0.18  from holding Lion Financial Group or generate 25.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Lion Financial Group  vs.  Artelo Biosciences

Lion Financial Group

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lion Financial Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain essential indicators, Lion Financial showed solid returns over the last few months and may actually be approaching a breakup point.

Artelo Biosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Artelo Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, Artelo Biosciences is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Lion Financial and Artelo Biosciences

The main advantage of trading using opposite Lion Financial and Artelo Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Financial position performs unexpectedly, Artelo Biosciences 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 Artelo Biosciences will offset losses from the drop in Artelo Biosciences' long position.

The idea behind Lion Financial Group and Artelo Biosciences 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.

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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.