Correlation Between Lion One and Ault Alliance
Can any of the company-specific risk be diversified away by investing in both Lion One and Ault Alliance 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 Ault Alliance 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 Ault Alliance, you can compare the effects of market volatilities on Lion One and Ault Alliance 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 Ault Alliance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Ault Alliance.
Diversification Opportunities for Lion One and Ault Alliance
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lion and Ault is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Ault Alliance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ault Alliance 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 Ault Alliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ault Alliance has no effect on the direction of Lion One i.e., Lion One and Ault Alliance go up and down completely randomly.
Pair Corralation between Lion One and Ault Alliance
Assuming the 90 days horizon Lion One Metals is expected to generate 0.48 times more return on investment than Ault Alliance. However, Lion One Metals is 2.07 times less risky than Ault Alliance. It trades about -0.04 of its potential returns per unit of risk. Ault Alliance is currently generating about -0.18 per unit of risk. If you would invest 62.00 in Lion One Metals on September 3, 2024 and sell it today you would lose (41.00) from holding Lion One Metals or give up 66.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 88.48% |
| Values | Daily Returns |
Lion One Metals vs. Ault Alliance
Performance |
| Timeline |
| Lion One Metals |
| Ault Alliance |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Lion One and Ault Alliance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and Ault Alliance
The main advantage of trading using opposite Lion One and Ault Alliance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, Ault Alliance 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 Ault Alliance will offset losses from the drop in Ault Alliance's long position.| Lion One vs. Irving Resources | Lion One vs. Headwater Gold | Lion One vs. Novo Resources Corp | Lion One vs. Snowline Gold Corp |
| Ault Alliance vs. Meiwu Technology Co | Ault Alliance vs. Reservoir Media | Ault Alliance vs. Weibo Corp | Ault Alliance vs. NETGEAR |
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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