Correlation Between Consolidated Communications and Lion One
Can any of the company-specific risk be diversified away by investing in both Consolidated Communications 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 Consolidated Communications and Lion One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consolidated Communications Holdings and Lion One Metals, you can compare the effects of market volatilities on Consolidated Communications 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 Consolidated Communications with a short position of Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consolidated Communications and Lion One.
Diversification Opportunities for Consolidated Communications and Lion One
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Consolidated and Lion is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Consolidated Communications Ho 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 Consolidated Communications 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 Consolidated Communications Holdings 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 Consolidated Communications i.e., Consolidated Communications and Lion One go up and down completely randomly.
Pair Corralation between Consolidated Communications and Lion One
Assuming the 90 days horizon Consolidated Communications Holdings is expected to generate 0.48 times more return on investment than Lion One. However, Consolidated Communications Holdings is 2.1 times less risky than Lion One. It trades about 0.04 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.03 per unit of risk. If you would invest 336.00 in Consolidated Communications Holdings on September 12, 2024 and sell it today you would earn a total of 108.00 from holding Consolidated Communications Holdings or generate 32.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Consolidated Communications Ho vs. Lion One Metals
Performance |
| Timeline |
| Consolidated Communications |
| Lion One Metals |
Consolidated Communications and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Consolidated Communications and Lion One
The main advantage of trading using opposite Consolidated Communications and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consolidated Communications 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.The idea behind Consolidated Communications Holdings and Lion One Metals pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Lion One vs. Franco Nevada | Lion One vs. Superior Plus Corp | Lion One vs. SIVERS SEMICONDUCTORS AB | Lion One vs. Norsk Hydro ASA |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |