Correlation Between LBA and ONT

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

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

Diversification Opportunities for LBA and ONT

0.54

Correlation Coefficient

LBA  ONT

Very weak diversification

The 3 months correlation between LBA and ONT is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding LBA and ONT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONT and LBA 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 LBA are associated (or correlated) with ONT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONT has no effect on the direction of LBA i.e., LBA and ONT go up and down completely randomly.

Pair Corralation between LBA and ONT

Assuming the 90 days trading horizon LBA is expected to generate 0.66 times more return on investment than ONT. However, LBA is 1.51 times less risky than ONT. It trades about 0.05 of its potential returns per unit of risk. ONT is currently generating about -0.05 per unit of risk. If you would invest  0.02  in LBA on July 30, 2025 and sell it today you would earn a total of  0.00  from holding LBA or generate 7.03% return on investment over 90 days.

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

LBA  vs.  ONT

LBA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LBA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, LBA may actually be approaching a critical reversion point that can send shares even higher in November 2025.

ONT

Risk-Adjusted Performance

Weakest

Over the last 90 days ONT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's basic indicators remain rather sound which may send shares a bit higher in November 2025. The latest tumult may also be a sign of longer-term up-swing for ONT shareholders.

Pair Trading with LBA and ONT

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

The idea behind LBA and ONT 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.