Correlation Between Lion One and Highwood Asset
Can any of the company-specific risk be diversified away by investing in both Lion One and Highwood Asset 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 Highwood Asset 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 Highwood Asset Management, you can compare the effects of market volatilities on Lion One and Highwood Asset 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 Highwood Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Highwood Asset.
Diversification Opportunities for Lion One and Highwood Asset
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lion and Highwood is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Highwood Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highwood Asset Management 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 Highwood Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highwood Asset Management has no effect on the direction of Lion One i.e., Lion One and Highwood Asset go up and down completely randomly.
Pair Corralation between Lion One and Highwood Asset
Assuming the 90 days horizon Lion One Metals is expected to under-perform the Highwood Asset. But the stock apears to be less risky and, when comparing its historical volatility, Lion One Metals is 1.15 times less risky than Highwood Asset. The stock trades about -0.04 of its potential returns per unit of risk. The Highwood Asset Management is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 672.00 in Highwood Asset Management on September 3, 2024 and sell it today you would lose (70.00) from holding Highwood Asset Management or give up 10.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion One Metals vs. Highwood Asset Management
Performance |
| Timeline |
| Lion One Metals |
| Highwood Asset Management |
Lion One and Highwood Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and Highwood Asset
The main advantage of trading using opposite Lion One and Highwood Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, Highwood Asset 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 Highwood Asset will offset losses from the drop in Highwood Asset's long position.The idea behind Lion One Metals and Highwood Asset Management 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.| Highwood Asset vs. Colliers International Group | Highwood Asset vs. Altus Group Limited | Highwood Asset vs. Harvest Global REIT | Highwood Asset vs. International Zeolite 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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