Correlation Between TRAINLINE PLC and Lion One
Can any of the company-specific risk be diversified away by investing in both TRAINLINE 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 TRAINLINE 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 TRAINLINE PLC LS and Lion One Metals, you can compare the effects of market volatilities on TRAINLINE 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 TRAINLINE PLC with a short position of Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRAINLINE PLC and Lion One.
Diversification Opportunities for TRAINLINE PLC and Lion One
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TRAINLINE and Lion is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding TRAINLINE PLC LS 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 TRAINLINE 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 TRAINLINE PLC LS 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 TRAINLINE PLC i.e., TRAINLINE PLC and Lion One go up and down completely randomly.
Pair Corralation between TRAINLINE PLC and Lion One
Assuming the 90 days trading horizon TRAINLINE PLC LS is expected to generate 0.6 times more return on investment than Lion One. However, TRAINLINE PLC LS is 1.68 times less risky than Lion One. It trades about 0.04 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.03 per unit of risk. If you would invest 348.00 in TRAINLINE PLC LS on September 5, 2024 and sell it today you would earn a total of 136.00 from holding TRAINLINE PLC LS or generate 39.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TRAINLINE PLC LS vs. Lion One Metals
Performance |
| Timeline |
| TRAINLINE PLC LS |
| Lion One Metals |
TRAINLINE PLC and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRAINLINE PLC and Lion One
The main advantage of trading using opposite TRAINLINE PLC and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRAINLINE 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.| TRAINLINE PLC vs. TRIPCOM GROUP DL 00125 | TRAINLINE PLC vs. TUI AG | TRAINLINE PLC vs. TripAdvisor | TRAINLINE PLC vs. ON THE BEACH |
| Lion One vs. MICRONIC MYDATA | Lion One vs. Hyrican Informationssysteme Aktiengesellschaft | Lion One vs. UNITED RENTALS | Lion One vs. INFORMATION SVC GRP |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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