Correlation Between Lion One and In Touch
Can any of the company-specific risk be diversified away by investing in both Lion One and In Touch 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 In Touch 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 In Touch Survey Systems, you can compare the effects of market volatilities on Lion One and In Touch 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 In Touch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and In Touch.
Diversification Opportunities for Lion One and In Touch
Very good diversification
The 3 months correlation between Lion and INX is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and In Touch Survey Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on In Touch Survey 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 In Touch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of In Touch Survey has no effect on the direction of Lion One i.e., Lion One and In Touch go up and down completely randomly.
Pair Corralation between Lion One and In Touch
Assuming the 90 days horizon Lion One Metals is expected to under-perform the In Touch. But the stock apears to be less risky and, when comparing its historical volatility, Lion One Metals is 2.73 times less risky than In Touch. The stock trades about -0.18 of its potential returns per unit of risk. The In Touch Survey Systems is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 36.00 in In Touch Survey Systems on September 4, 2024 and sell it today you would earn a total of 14.00 from holding In Touch Survey Systems or generate 38.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion One Metals vs. In Touch Survey Systems
Performance |
| Timeline |
| Lion One Metals |
| In Touch Survey |
Lion One and In Touch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and In Touch
The main advantage of trading using opposite Lion One and In Touch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, In Touch 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 In Touch will offset losses from the drop in In Touch's long position.The idea behind Lion One Metals and In Touch Survey Systems 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.| In Touch vs. Quisitive Technology Solutions | In Touch vs. DGTL Holdings | In Touch vs. Plurilock Security | In Touch vs. iShares Canadian HYBrid |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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