Correlation Between Gold Bull and Lion One
Can any of the company-specific risk be diversified away by investing in both Gold Bull 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 Gold Bull and Lion One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Bull Resources and Lion One Metals, you can compare the effects of market volatilities on Gold Bull 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 Gold Bull with a short position of Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Bull and Lion One.
Diversification Opportunities for Gold Bull and Lion One
Weak diversification
The 3 months correlation between Gold and Lion is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Gold Bull Resources 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 Gold Bull 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 Gold Bull Resources 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 Gold Bull i.e., Gold Bull and Lion One go up and down completely randomly.
Pair Corralation between Gold Bull and Lion One
Assuming the 90 days horizon Gold Bull Resources is expected to generate 1.8 times more return on investment than Lion One. However, Gold Bull is 1.8 times more volatile than Lion One Metals. It trades about 0.02 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.08 per unit of risk. If you would invest 33.00 in Gold Bull Resources on August 25, 2024 and sell it today you would lose (9.00) from holding Gold Bull Resources or give up 27.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Bull Resources vs. Lion One Metals
Performance |
| Timeline |
| Gold Bull Resources |
| Lion One Metals |
Gold Bull and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Bull and Lion One
The main advantage of trading using opposite Gold Bull and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Bull 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.| Gold Bull vs. Aurion Resources | Gold Bull vs. Liberty Gold Corp | Gold Bull vs. Rio2 Limited | Gold Bull vs. Orezone Gold Corp |
| Lion One vs. Ascendant Resources | Lion One vs. Cantex Mine Development | Lion One vs. Amarc Resources | Lion One vs. Sterling Metals 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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