Correlation Between Lion Electric and Metso Outotec
Can any of the company-specific risk be diversified away by investing in both Lion Electric and Metso Outotec 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 Metso Outotec 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 Metso Outotec Oyj, you can compare the effects of market volatilities on Lion Electric and Metso Outotec 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 Metso Outotec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Electric and Metso Outotec.
Diversification Opportunities for Lion Electric and Metso Outotec
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lion and Metso is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lion Electric Corp and Metso Outotec Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metso Outotec Oyj 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 Metso Outotec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metso Outotec Oyj has no effect on the direction of Lion Electric i.e., Lion Electric and Metso Outotec go up and down completely randomly.
Pair Corralation between Lion Electric and Metso Outotec
If you would invest 37.00 in Lion Electric Corp on September 13, 2024 and sell it today you would lose (3.00) from holding Lion Electric Corp or give up 8.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Lion Electric Corp vs. Metso Outotec Oyj
Performance |
| Timeline |
| Lion Electric Corp |
| Metso Outotec Oyj |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lion Electric and Metso Outotec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion Electric and Metso Outotec
The main advantage of trading using opposite Lion Electric and Metso Outotec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Electric position performs unexpectedly, Metso Outotec 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 Metso Outotec will offset losses from the drop in Metso Outotec's long position.| Lion Electric vs. Xos Inc | Lion Electric vs. Ideanomics | Lion Electric vs. Nikola Corp | Lion Electric vs. Wabash National |
| Metso Outotec vs. Ideanomics | Metso Outotec vs. Deere Company | Metso Outotec vs. Caterpillar | Metso Outotec vs. Lion Electric 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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