Correlation Between Fortis Pref and Lion One
Can any of the company-specific risk be diversified away by investing in both Fortis Pref 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 Fortis Pref and Lion One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortis Pref M and Lion One Metals, you can compare the effects of market volatilities on Fortis Pref 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 Fortis Pref with a short position of Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortis Pref and Lion One.
Diversification Opportunities for Fortis Pref and Lion One
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fortis and Lion is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Fortis Pref M 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 Fortis Pref 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 Fortis Pref M 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 Fortis Pref i.e., Fortis Pref and Lion One go up and down completely randomly.
Pair Corralation between Fortis Pref and Lion One
Assuming the 90 days trading horizon Fortis Pref is expected to generate 3.03 times less return on investment than Lion One. But when comparing it to its historical volatility, Fortis Pref M is 8.09 times less risky than Lion One. It trades about 0.4 of its potential returns per unit of risk. Lion One Metals is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 25.00 in Lion One Metals on October 9, 2024 and sell it today you would earn a total of 3.00 from holding Lion One Metals or generate 12.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortis Pref M vs. Lion One Metals
Performance |
| Timeline |
| Fortis Pref M |
| Lion One Metals |
Fortis Pref and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortis Pref and Lion One
The main advantage of trading using opposite Fortis Pref and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortis Pref 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.| Fortis Pref vs. Dream Industrial Real | Fortis Pref vs. XXIX Metal Corp | Fortis Pref vs. CVS HEALTH CDR | Fortis Pref vs. Mako Mining 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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