Correlation Between American Axle and Lion One
Can any of the company-specific risk be diversified away by investing in both American Axle 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 American Axle and Lion One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Axle Manufacturing and Lion One Metals, you can compare the effects of market volatilities on American Axle 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 American Axle with a short position of Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Axle and Lion One.
Diversification Opportunities for American Axle and Lion One
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and Lion is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding American Axle Manufacturing 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 American Axle 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 American Axle Manufacturing 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 American Axle i.e., American Axle and Lion One go up and down completely randomly.
Pair Corralation between American Axle and Lion One
Considering the 90-day investment horizon American Axle Manufacturing is expected to generate 0.96 times more return on investment than Lion One. However, American Axle Manufacturing is 1.04 times less risky than Lion One. It trades about 0.23 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.2 per unit of risk. If you would invest 580.00 in American Axle Manufacturing on September 3, 2024 and sell it today you would earn a total of 81.00 from holding American Axle Manufacturing or generate 13.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Axle Manufacturing vs. Lion One Metals
Performance |
| Timeline |
| American Axle Manufa |
| Lion One Metals |
American Axle and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Axle and Lion One
The main advantage of trading using opposite American Axle and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Axle 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.| American Axle vs. Allison Transmission Holdings | American Axle vs. Aptiv PLC | American Axle vs. LKQ Corporation | American Axle vs. Lear Corporation |
| Lion One vs. Irving Resources | Lion One vs. Headwater Gold | Lion One vs. Novo Resources Corp | Lion One vs. Snowline Gold 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |