Correlation Between BTU Metals and Lion One
Can any of the company-specific risk be diversified away by investing in both BTU 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 BTU 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 BTU Metals Corp and Lion One Metals, you can compare the effects of market volatilities on BTU 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 BTU Metals with a short position of Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTU Metals and Lion One.
Diversification Opportunities for BTU Metals and Lion One
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between BTU and Lion is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding BTU 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 BTU 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 BTU 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 BTU Metals i.e., BTU Metals and Lion One go up and down completely randomly.
Pair Corralation between BTU Metals and Lion One
Assuming the 90 days horizon BTU Metals is expected to generate 12.52 times less return on investment than Lion One. In addition to that, BTU Metals is 1.04 times more volatile than Lion One Metals. It trades about 0.02 of its total potential returns per unit of risk. Lion One Metals is currently generating about 0.25 per unit of volatility. If you would invest 18.00 in Lion One Metals on October 20, 2024 and sell it today you would earn a total of 4.00 from holding Lion One Metals or generate 22.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
BTU Metals Corp vs. Lion One Metals
Performance |
| Timeline |
| BTU Metals Corp |
| Lion One Metals |
BTU Metals and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTU Metals and Lion One
The main advantage of trading using opposite BTU Metals and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTU 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.| BTU Metals vs. Avient Corp | BTU Metals vs. Ecovyst | BTU Metals vs. Sensient Technologies | BTU Metals vs. MYR Group |
| 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |