Correlation Between WPP PLC and Lion One

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Can any of the company-specific risk be diversified away by investing in both WPP PLC 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 WPP PLC and Lion One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WPP PLC and Lion One Metals, you can compare the effects of market volatilities on WPP PLC 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 WPP PLC with a short position of Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of WPP PLC and Lion One.

Diversification Opportunities for WPP PLC and Lion One

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between WPP and Lion is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding WPP PLC 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 WPP PLC 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 WPP PLC 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 WPP PLC i.e., WPP PLC and Lion One go up and down completely randomly.

Pair Corralation between WPP PLC and Lion One

If you would invest  0.00  in WPP PLC on September 13, 2024 and sell it today you would earn a total of  0.00  from holding WPP PLC or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy4.55%
ValuesDaily Returns

WPP PLC  vs.  Lion One Metals

 Performance 
       Timeline  
WPP PLC 

Risk-Adjusted Performance

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Weak
 
Strong
Solid
Over the last 90 days WPP PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, WPP PLC is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.
Lion One Metals 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Lion One Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

WPP PLC and Lion One Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with WPP PLC and Lion One

The main advantage of trading using opposite WPP PLC and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WPP PLC 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.
The idea behind WPP PLC and Lion One Metals 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

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