Correlation Between Lion One and Balchem
Can any of the company-specific risk be diversified away by investing in both Lion One and Balchem 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 Balchem 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 Balchem, you can compare the effects of market volatilities on Lion One and Balchem 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 Balchem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Balchem.
Diversification Opportunities for Lion One and Balchem
Very good diversification
The 3 months correlation between Lion and Balchem is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Balchem in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balchem 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 Balchem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balchem has no effect on the direction of Lion One i.e., Lion One and Balchem go up and down completely randomly.
Pair Corralation between Lion One and Balchem
Assuming the 90 days horizon Lion One Metals is expected to under-perform the Balchem. In addition to that, Lion One is 1.95 times more volatile than Balchem. It trades about -0.3 of its total potential returns per unit of risk. Balchem is currently generating about 0.19 per unit of volatility. If you would invest 17,079 in Balchem on August 28, 2024 and sell it today you would earn a total of 1,153 from holding Balchem or generate 6.75% 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. Balchem
Performance |
| Timeline |
| Lion One Metals |
| Balchem |
Lion One and Balchem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and Balchem
The main advantage of trading using opposite Lion One and Balchem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, Balchem 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 Balchem will offset losses from the drop in Balchem'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 |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |