Correlation Between Lion One and Westshore Terminals
Can any of the company-specific risk be diversified away by investing in both Lion One and Westshore Terminals 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 Westshore Terminals 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 Westshore Terminals Investment, you can compare the effects of market volatilities on Lion One and Westshore Terminals 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 Westshore Terminals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Westshore Terminals.
Diversification Opportunities for Lion One and Westshore Terminals
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lion and Westshore is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Westshore Terminals Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westshore Terminals 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 Westshore Terminals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westshore Terminals has no effect on the direction of Lion One i.e., Lion One and Westshore Terminals go up and down completely randomly.
Pair Corralation between Lion One and Westshore Terminals
Assuming the 90 days horizon Lion One Metals is expected to under-perform the Westshore Terminals. In addition to that, Lion One is 4.27 times more volatile than Westshore Terminals Investment. It trades about -0.18 of its total potential returns per unit of risk. Westshore Terminals Investment is currently generating about 0.28 per unit of volatility. If you would invest 2,301 in Westshore Terminals Investment on September 1, 2024 and sell it today you would earn a total of 125.00 from holding Westshore Terminals Investment or generate 5.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion One Metals vs. Westshore Terminals Investment
Performance |
| Timeline |
| Lion One Metals |
| Westshore Terminals |
Lion One and Westshore Terminals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and Westshore Terminals
The main advantage of trading using opposite Lion One and Westshore Terminals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, Westshore Terminals 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 Westshore Terminals will offset losses from the drop in Westshore Terminals' long position.| Lion One vs. First Majestic Silver | Lion One vs. Ivanhoe Energy | Lion One vs. Orezone Gold Corp | Lion One vs. Faraday Copper Corp |
| Westshore Terminals vs. Mullen Group | Westshore Terminals vs. Ritchie Bros Auctioneers | Westshore Terminals vs. Winpak | Westshore Terminals vs. North West |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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