Correlation Between Denison Mines and Lion One
Can any of the company-specific risk be diversified away by investing in both Denison Mines 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 Denison Mines and Lion One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Denison Mines Corp and Lion One Metals, you can compare the effects of market volatilities on Denison Mines 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 Denison Mines with a short position of Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Denison Mines and Lion One.
Diversification Opportunities for Denison Mines and Lion One
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Denison and Lion is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Denison Mines 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 Denison Mines 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 Denison Mines 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 Denison Mines i.e., Denison Mines and Lion One go up and down completely randomly.
Pair Corralation between Denison Mines and Lion One
Considering the 90-day investment horizon Denison Mines Corp is expected to generate 0.81 times more return on investment than Lion One. However, Denison Mines Corp is 1.24 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 -0.04 per unit of risk. If you would invest 143.00 in Denison Mines Corp on October 24, 2024 and sell it today you would earn a total of 53.50 from holding Denison Mines Corp or generate 37.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Denison Mines Corp vs. Lion One Metals
Performance |
| Timeline |
| Denison Mines Corp |
| Lion One Metals |
Denison Mines and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Denison Mines and Lion One
The main advantage of trading using opposite Denison Mines and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Denison Mines 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.| Denison Mines vs. Energy Fuels | Denison Mines vs. enCore Energy Corp | Denison Mines vs. Ur Energy | Denison Mines vs. Cameco Corp |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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