Correlation Between ONWARD MEDICAL and LION ONE
Can any of the company-specific risk be diversified away by investing in both ONWARD MEDICAL 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 ONWARD MEDICAL and LION ONE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ONWARD MEDICAL BV and LION ONE METALS, you can compare the effects of market volatilities on ONWARD MEDICAL 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 ONWARD MEDICAL with a short position of LION ONE. Check out your portfolio center. Please also check ongoing floating volatility patterns of ONWARD MEDICAL and LION ONE.
Diversification Opportunities for ONWARD MEDICAL and LION ONE
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ONWARD and LION is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding ONWARD MEDICAL BV 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 ONWARD MEDICAL 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 ONWARD MEDICAL BV 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 ONWARD MEDICAL i.e., ONWARD MEDICAL and LION ONE go up and down completely randomly.
Pair Corralation between ONWARD MEDICAL and LION ONE
Assuming the 90 days horizon ONWARD MEDICAL BV is expected to generate 0.64 times more return on investment than LION ONE. However, ONWARD MEDICAL BV is 1.55 times less risky than LION ONE. It trades about -0.24 of its potential returns per unit of risk. LION ONE METALS is currently generating about -0.25 per unit of risk. If you would invest 628.00 in ONWARD MEDICAL BV on December 4, 2024 and sell it today you would lose (100.00) from holding ONWARD MEDICAL BV or give up 15.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ONWARD MEDICAL BV vs. LION ONE METALS
Performance |
| Timeline |
| ONWARD MEDICAL BV |
| LION ONE METALS |
ONWARD MEDICAL and LION ONE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ONWARD MEDICAL and LION ONE
The main advantage of trading using opposite ONWARD MEDICAL and LION ONE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ONWARD MEDICAL 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.| ONWARD MEDICAL vs. Forsys Metals Corp | ONWARD MEDICAL vs. Jacquet Metal Service | ONWARD MEDICAL vs. Fortescue Metals Group | ONWARD MEDICAL vs. Japan Tobacco |
| LION ONE vs. Fast Retailing Co | LION ONE vs. BJs Wholesale Club | LION ONE vs. Air Lease | LION ONE vs. ALERION CLEANPOWER |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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