Correlation Between Japan Gold and Lion One
Can any of the company-specific risk be diversified away by investing in both Japan Gold 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 Japan Gold and Lion One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Gold Corp and Lion One Metals, you can compare the effects of market volatilities on Japan Gold 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 Japan Gold with a short position of Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Gold and Lion One.
Diversification Opportunities for Japan Gold and Lion One
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Japan and Lion is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Japan Gold 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 Japan Gold 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 Japan Gold 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 Japan Gold i.e., Japan Gold and Lion One go up and down completely randomly.
Pair Corralation between Japan Gold and Lion One
Assuming the 90 days horizon Japan Gold is expected to generate 5.55 times less return on investment than Lion One. But when comparing it to its historical volatility, Japan Gold Corp is 1.36 times less risky than Lion One. It trades about 0.07 of its potential returns per unit of risk. Lion One Metals is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Lion One Metals on November 5, 2024 and sell it today you would earn a total of 7.00 from holding Lion One Metals or generate 35.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Japan Gold Corp vs. Lion One Metals
Performance |
| Timeline |
| Japan Gold Corp |
| Lion One Metals |
Japan Gold and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Gold and Lion One
The main advantage of trading using opposite Japan Gold and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Gold 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.| Japan Gold vs. Robex Resources | Japan Gold vs. Rover Metals Corp | Japan Gold vs. Orefinders Resources | Japan Gold vs. Labrador Gold 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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