Correlation Between Lion One and Jaguar Mining
Can any of the company-specific risk be diversified away by investing in both Lion One and Jaguar Mining 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 Jaguar Mining 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 Jaguar Mining, you can compare the effects of market volatilities on Lion One and Jaguar Mining 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 Jaguar Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Jaguar Mining.
Diversification Opportunities for Lion One and Jaguar Mining
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lion and Jaguar is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Jaguar Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaguar Mining 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 Jaguar Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaguar Mining has no effect on the direction of Lion One i.e., Lion One and Jaguar Mining go up and down completely randomly.
Pair Corralation between Lion One and Jaguar Mining
Assuming the 90 days horizon Lion One Metals is expected to under-perform the Jaguar Mining. But the stock apears to be less risky and, when comparing its historical volatility, Lion One Metals is 1.02 times less risky than Jaguar Mining. The stock trades about -0.04 of its potential returns per unit of risk. The Jaguar Mining is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 276.00 in Jaguar Mining on October 25, 2024 and sell it today you would lose (47.00) from holding Jaguar Mining or give up 17.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion One Metals vs. Jaguar Mining
Performance |
| Timeline |
| Lion One Metals |
| Jaguar Mining |
Lion One and Jaguar Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and Jaguar Mining
The main advantage of trading using opposite Lion One and Jaguar Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, Jaguar Mining 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 Jaguar Mining will offset losses from the drop in Jaguar Mining's long position.The idea behind Lion One Metals and Jaguar Mining 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.| Jaguar Mining vs. Wallbridge Mining | Jaguar Mining vs. Dundee Precious Metals | Jaguar Mining vs. International Tower Hill | Jaguar Mining vs. Centerra Gold |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |