Correlation Between Lion One and Bold Ventures
Can any of the company-specific risk be diversified away by investing in both Lion One and Bold Ventures 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 One and Bold Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion One Metals and Bold Ventures, you can compare the effects of market volatilities on Lion One and Bold Ventures 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 One with a short position of Bold Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Bold Ventures.
Diversification Opportunities for Lion One and Bold Ventures
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lion and Bold is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Bold Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bold Ventures and Lion One 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 One Metals are associated (or correlated) with Bold Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bold Ventures has no effect on the direction of Lion One i.e., Lion One and Bold Ventures go up and down completely randomly.
Pair Corralation between Lion One and Bold Ventures
Assuming the 90 days horizon Lion One is expected to generate 3.15 times less return on investment than Bold Ventures. But when comparing it to its historical volatility, Lion One Metals is 1.86 times less risky than Bold Ventures. It trades about 0.04 of its potential returns per unit of risk. Bold Ventures is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 5.00 in Bold Ventures on October 11, 2024 and sell it today you would earn a total of 0.50 from holding Bold Ventures or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion One Metals vs. Bold Ventures
Performance |
| Timeline |
| Lion One Metals |
| Bold Ventures |
Lion One and Bold Ventures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and Bold Ventures
The main advantage of trading using opposite Lion One and Bold Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, Bold Ventures 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 Bold Ventures will offset losses from the drop in Bold Ventures' long position.The idea behind Lion One Metals and Bold Ventures pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Bold Ventures vs. Osisko Metals | Bold Ventures vs. AKITA Drilling | Bold Ventures vs. Ramp Metals | Bold Ventures vs. Precision Drilling |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |