Correlation Between Bombardier and Lion Electric
Can any of the company-specific risk be diversified away by investing in both Bombardier and Lion Electric 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 Bombardier and Lion Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bombardier and Lion Electric Corp, you can compare the effects of market volatilities on Bombardier and Lion Electric 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 Bombardier with a short position of Lion Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bombardier and Lion Electric.
Diversification Opportunities for Bombardier and Lion Electric
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bombardier and Lion is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Bombardier and Lion Electric Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Electric Corp and Bombardier 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 Bombardier are associated (or correlated) with Lion Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Electric Corp has no effect on the direction of Bombardier i.e., Bombardier and Lion Electric go up and down completely randomly.
Pair Corralation between Bombardier and Lion Electric
Assuming the 90 days trading horizon Bombardier is expected to generate 0.41 times more return on investment than Lion Electric. However, Bombardier is 2.42 times less risky than Lion Electric. It trades about 0.02 of its potential returns per unit of risk. Lion Electric Corp is currently generating about -0.18 per unit of risk. If you would invest 9,175 in Bombardier on August 29, 2024 and sell it today you would earn a total of 127.00 from holding Bombardier or generate 1.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bombardier vs. Lion Electric Corp
Performance |
| Timeline |
| Bombardier |
| Lion Electric Corp |
Bombardier and Lion Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bombardier and Lion Electric
The main advantage of trading using opposite Bombardier and Lion Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bombardier position performs unexpectedly, Lion Electric 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 Electric will offset losses from the drop in Lion Electric's long position.| Bombardier vs. BlackBerry | Bombardier vs. Air Canada | Bombardier vs. Suncor Energy | Bombardier vs. Manulife Financial Corp |
| Lion Electric vs. Lion Electric Corp | Lion Electric vs. Alimentation Couchen Tard | Lion Electric vs. BRP Inc |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |