Correlation Between Lion Electric and Chorus Aviation
Can any of the company-specific risk be diversified away by investing in both Lion Electric and Chorus Aviation 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 Lion Electric and Chorus Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion Electric Corp and Chorus Aviation, you can compare the effects of market volatilities on Lion Electric and Chorus Aviation 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 Lion Electric with a short position of Chorus Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Electric and Chorus Aviation.
Diversification Opportunities for Lion Electric and Chorus Aviation
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lion and Chorus is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Lion Electric Corp and Chorus Aviation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chorus Aviation and Lion Electric 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 Lion Electric Corp are associated (or correlated) with Chorus Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chorus Aviation has no effect on the direction of Lion Electric i.e., Lion Electric and Chorus Aviation go up and down completely randomly.
Pair Corralation between Lion Electric and Chorus Aviation
Assuming the 90 days trading horizon Lion Electric Corp is expected to under-perform the Chorus Aviation. In addition to that, Lion Electric is 2.02 times more volatile than Chorus Aviation. It trades about -0.1 of its total potential returns per unit of risk. Chorus Aviation is currently generating about 0.01 per unit of volatility. If you would invest 317.00 in Chorus Aviation on August 26, 2024 and sell it today you would earn a total of 8.00 from holding Chorus Aviation or generate 2.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion Electric Corp vs. Chorus Aviation
Performance |
| Timeline |
| Lion Electric Corp |
| Chorus Aviation |
Lion Electric and Chorus Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion Electric and Chorus Aviation
The main advantage of trading using opposite Lion Electric and Chorus Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Electric position performs unexpectedly, Chorus Aviation 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 Chorus Aviation will offset losses from the drop in Chorus Aviation's long position.| Lion Electric vs. Lion Electric Corp | Lion Electric vs. Alimentation Couchen Tard | Lion Electric vs. BRP Inc |
| Chorus Aviation vs. Cargojet | Chorus Aviation vs. Exchange Income | Chorus Aviation vs. Cineplex | Chorus Aviation vs. Transat AT |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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