Correlation Between Anfield Resources and Lion One
Can any of the company-specific risk be diversified away by investing in both Anfield Resources and Lion One 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 Anfield Resources and Lion One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anfield Resources and Lion One Metals, you can compare the effects of market volatilities on Anfield Resources and Lion One 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 Anfield Resources with a short position of Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anfield Resources and Lion One.
Diversification Opportunities for Anfield Resources and Lion One
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Anfield and Lion is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Anfield Resources and Lion One Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion One Metals and Anfield Resources 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 Anfield Resources are associated (or correlated) with Lion One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion One Metals has no effect on the direction of Anfield Resources i.e., Anfield Resources and Lion One go up and down completely randomly.
Pair Corralation between Anfield Resources and Lion One
Assuming the 90 days trading horizon Anfield Resources is expected to generate 2.99 times less return on investment than Lion One. In addition to that, Anfield Resources is 1.17 times more volatile than Lion One Metals. It trades about 0.07 of its total potential returns per unit of risk. Lion One Metals is currently generating about 0.23 per unit of volatility. If you would invest 16.00 in Lion One Metals on October 21, 2024 and sell it today you would earn a total of 4.00 from holding Lion One Metals or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anfield Resources vs. Lion One Metals
Performance |
| Timeline |
| Anfield Resources |
| Lion One Metals |
Anfield Resources and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anfield Resources and Lion One
The main advantage of trading using opposite Anfield Resources and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anfield Resources position performs unexpectedly, Lion One 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 One will offset losses from the drop in Lion One's long position.| Anfield Resources vs. Sumitomo Rubber Industries | Anfield Resources vs. Agilent Technologies | Anfield Resources vs. Rayonier Advanced Materials | Anfield Resources vs. SOFI TECHNOLOGIES |
| Lion One vs. FARM 51 GROUP | Lion One vs. AGRICULTBK HADR25 YC | Lion One vs. ALEFARM BREWING DK 05 | Lion One vs. Chongqing Machinery Electric |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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