Correlation Between Lion One and Mammoth Resources
Can any of the company-specific risk be diversified away by investing in both Lion One and Mammoth Resources 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 Mammoth Resources 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 Mammoth Resources Corp, you can compare the effects of market volatilities on Lion One and Mammoth Resources 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 Mammoth Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Mammoth Resources.
Diversification Opportunities for Lion One and Mammoth Resources
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lion and Mammoth is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Mammoth Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mammoth Resources Corp 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 Mammoth Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mammoth Resources Corp has no effect on the direction of Lion One i.e., Lion One and Mammoth Resources go up and down completely randomly.
Pair Corralation between Lion One and Mammoth Resources
Assuming the 90 days horizon Lion One Metals is expected to under-perform the Mammoth Resources. But the stock apears to be less risky and, when comparing its historical volatility, Lion One Metals is 3.11 times less risky than Mammoth Resources. The stock trades about -0.05 of its potential returns per unit of risk. The Mammoth Resources Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2.00 in Mammoth Resources Corp on October 30, 2024 and sell it today you would lose (1.00) from holding Mammoth Resources Corp or give up 50.0% 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. Mammoth Resources Corp
Performance |
| Timeline |
| Lion One Metals |
| Mammoth Resources Corp |
Lion One and Mammoth Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and Mammoth Resources
The main advantage of trading using opposite Lion One and Mammoth Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, Mammoth Resources 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 Mammoth Resources will offset losses from the drop in Mammoth Resources' long position.| Lion One vs. NV Gold Corp | Lion One vs. Prosper Gold Corp | Lion One vs. Kesselrun Resources | Lion One vs. iShares Canadian HYBrid |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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