Correlation Between Aelf and LSK

Can any of the company-specific risk be diversified away by investing in both Aelf and LSK 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 Aelf and LSK into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between aelf and LSK, you can compare the effects of market volatilities on Aelf and LSK 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 Aelf with a short position of LSK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aelf and LSK.

Diversification Opportunities for Aelf and LSK

0.93

Correlation Coefficient

Aelf  LSK

Almost no diversification

The 3 months correlation between Aelf and LSK is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding aelf and LSK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LSK and Aelf 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 aelf are associated (or correlated) with LSK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LSK has no effect on the direction of Aelf i.e., Aelf and LSK go up and down completely randomly.

Pair Corralation between Aelf and LSK

Assuming the 90 days trading horizon aelf is expected to generate 0.68 times more return on investment than LSK. However, aelf is 1.46 times less risky than LSK. It trades about -0.01 of its potential returns per unit of risk. LSK is currently generating about -0.03 per unit of risk. If you would invest  24.00  in aelf on April 23, 2025 and sell it today you would lose (1.00) from holding aelf or give up 4.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

aelf  vs.  LSK

aelf

Risk-Adjusted Performance

Very Weak

Over the last 90 days aelf has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Aelf is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

LSK

Risk-Adjusted Performance

Very Weak

Over the last 90 days LSK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Crypto's forward-looking signals remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for LSK shareholders.

Pair Trading with Aelf and LSK

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

The idea behind aelf and LSK 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.