Correlation Between Caldera and Loaded Lions

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

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

Diversification Opportunities for Caldera and Loaded Lions

-0.24

Correlation Coefficient

Caldera  Loaded Lions

Very good diversification

The 3 months correlation between Caldera and Loaded is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Caldera and Loaded Lions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loaded Lions and Caldera 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 Caldera are associated (or correlated) with Loaded Lions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loaded Lions has no effect on the direction of Caldera i.e., Caldera and Loaded Lions go up and down completely randomly.

Pair Corralation between Caldera and Loaded Lions

Assuming the 90 days trading horizon Caldera is expected to generate 1.09 times less return on investment than Loaded Lions. In addition to that, Caldera is 1.0 times more volatile than Loaded Lions. It trades about 0.04 of its total potential returns per unit of risk. Loaded Lions is currently generating about 0.04 per unit of volatility. If you would invest  0.00  in Loaded Lions on July 12, 2025 and sell it today you would earn a total of  1.47  from holding Loaded Lions or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Caldera  vs.  Loaded Lions

Caldera

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Caldera are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Caldera exhibited solid returns over the last few months and may actually be approaching a breakup point.

Loaded Lions

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Loaded Lions are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, Loaded Lions exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Caldera and Loaded Lions

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

The idea behind Caldera and Loaded Lions 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.

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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.