Correlation Between Akamai Technologies and Lion Biotechnologies
Can any of the company-specific risk be diversified away by investing in both Akamai Technologies and Lion Biotechnologies 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 Akamai Technologies and Lion Biotechnologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akamai Technologies and Lion Biotechnologies, you can compare the effects of market volatilities on Akamai Technologies and Lion Biotechnologies 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 Akamai Technologies with a short position of Lion Biotechnologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akamai Technologies and Lion Biotechnologies.
Diversification Opportunities for Akamai Technologies and Lion Biotechnologies
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Akamai and Lion is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Akamai Technologies and Lion Biotechnologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Biotechnologies and Akamai Technologies 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 Akamai Technologies are associated (or correlated) with Lion Biotechnologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Biotechnologies has no effect on the direction of Akamai Technologies i.e., Akamai Technologies and Lion Biotechnologies go up and down completely randomly.
Pair Corralation between Akamai Technologies and Lion Biotechnologies
Assuming the 90 days trading horizon Akamai Technologies is expected to generate 0.57 times more return on investment than Lion Biotechnologies. However, Akamai Technologies is 1.75 times less risky than Lion Biotechnologies. It trades about 0.09 of its potential returns per unit of risk. Lion Biotechnologies is currently generating about 0.05 per unit of risk. If you would invest 6,733 in Akamai Technologies on September 1, 2025 and sell it today you would earn a total of 990.00 from holding Akamai Technologies or generate 14.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Akamai Technologies vs. Lion Biotechnologies
Performance |
| Timeline |
| Akamai Technologies |
| Lion Biotechnologies |
Akamai Technologies and Lion Biotechnologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akamai Technologies and Lion Biotechnologies
The main advantage of trading using opposite Akamai Technologies and Lion Biotechnologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akamai Technologies position performs unexpectedly, Lion Biotechnologies 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 Lion Biotechnologies will offset losses from the drop in Lion Biotechnologies' long position.| Akamai Technologies vs. HK Electric Investments | Akamai Technologies vs. THAI BEVERAGE | Akamai Technologies vs. DIVERSIFIED ROYALTY | Akamai Technologies vs. SAN MIGUEL BREWERY |
| Lion Biotechnologies vs. CVR Medical Corp | Lion Biotechnologies vs. PULSION Medical Systems | Lion Biotechnologies vs. Advanced Medical Solutions | Lion Biotechnologies vs. Inspire Medical Systems |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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