Correlation Between Arbor Metals and Lion One
Can any of the company-specific risk be diversified away by investing in both Arbor Metals 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 Arbor Metals and Lion One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arbor Metals Corp and Lion One Metals, you can compare the effects of market volatilities on Arbor Metals 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 Arbor Metals with a short position of Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arbor Metals and Lion One.
Diversification Opportunities for Arbor Metals and Lion One
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Arbor and Lion is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Arbor Metals Corp 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 Arbor Metals 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 Arbor Metals Corp 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 Arbor Metals i.e., Arbor Metals and Lion One go up and down completely randomly.
Pair Corralation between Arbor Metals and Lion One
Assuming the 90 days horizon Arbor Metals Corp is expected to generate 1.02 times more return on investment than Lion One. However, Arbor Metals is 1.02 times more volatile than Lion One Metals. It trades about -0.15 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.27 per unit of risk. If you would invest 39.00 in Arbor Metals Corp on August 26, 2024 and sell it today you would lose (4.00) from holding Arbor Metals Corp or give up 10.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arbor Metals Corp vs. Lion One Metals
Performance |
| Timeline |
| Arbor Metals Corp |
| Lion One Metals |
Arbor Metals and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arbor Metals and Lion One
The main advantage of trading using opposite Arbor Metals and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arbor Metals 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.| Arbor Metals vs. First Majestic Silver | Arbor Metals vs. Ivanhoe Energy | Arbor Metals vs. Orezone Gold Corp | Arbor Metals vs. Faraday Copper Corp |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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