Correlation Between Lion One and Nano One
Can any of the company-specific risk be diversified away by investing in both Lion One and Nano One 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 Nano One 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 Nano One Materials, you can compare the effects of market volatilities on Lion One and Nano One 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 Nano One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Nano One.
Diversification Opportunities for Lion One and Nano One
Good diversification
The 3 months correlation between Lion and Nano is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Nano One Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nano One Materials 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 Nano One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nano One Materials has no effect on the direction of Lion One i.e., Lion One and Nano One go up and down completely randomly.
Pair Corralation between Lion One and Nano One
Assuming the 90 days horizon Lion One Metals is expected to generate 0.72 times more return on investment than Nano One. However, Lion One Metals is 1.39 times less risky than Nano One. It trades about 0.07 of its potential returns per unit of risk. Nano One Materials is currently generating about 0.02 per unit of risk. If you would invest 29.00 in Lion One Metals on November 7, 2024 and sell it today you would earn a total of 9.00 from holding Lion One Metals or generate 31.03% 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. Nano One Materials
Performance |
| Timeline |
| Lion One Metals |
| Nano One Materials |
Lion One and Nano One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and Nano One
The main advantage of trading using opposite Lion One and Nano One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, Nano One 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 Nano One will offset losses from the drop in Nano One's long position.| Lion One vs. IAMGold | Lion One vs. Eldorado Gold Corp | Lion One vs. Alamos Gold | Lion One vs. NovaGold Resources |
| Nano One vs. Plaza Retail REIT | Nano One vs. Maple Leaf Foods | Nano One vs. Leading Edge Materials | Nano One vs. Profound Medical 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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