Correlation Between Arizona Metals and Lion One
Can any of the company-specific risk be diversified away by investing in both Arizona 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 Arizona 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 Arizona Metals Corp and Lion One Metals, you can compare the effects of market volatilities on Arizona 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 Arizona Metals with a short position of Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arizona Metals and Lion One.
Diversification Opportunities for Arizona Metals and Lion One
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Arizona and Lion is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Arizona 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 Arizona 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 Arizona 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 Arizona Metals i.e., Arizona Metals and Lion One go up and down completely randomly.
Pair Corralation between Arizona Metals and Lion One
Assuming the 90 days trading horizon Arizona Metals Corp is expected to generate 1.84 times more return on investment than Lion One. However, Arizona Metals is 1.84 times more volatile than Lion One Metals. It trades about 0.19 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.22 per unit of risk. If you would invest 145.00 in Arizona Metals Corp on August 30, 2024 and sell it today you would earn a total of 36.00 from holding Arizona Metals Corp or generate 24.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arizona Metals Corp vs. Lion One Metals
Performance |
| Timeline |
| Arizona Metals Corp |
| Lion One Metals |
Arizona Metals and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arizona Metals and Lion One
The main advantage of trading using opposite Arizona Metals and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arizona 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.| Arizona Metals vs. i 80 Gold Corp | Arizona Metals vs. Ressources Minieres Radisson | Arizona Metals vs. Amerigo Resources | Arizona Metals vs. Aris Gold Corp |
| Lion One vs. Arizona Sonoran Copper | Lion One vs. Filo Mining Corp | Lion One vs. Marimaca Copper Corp | Lion One vs. iShares Canadian HYBrid |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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