Correlation Between Lion One and BTU Metals
Can any of the company-specific risk be diversified away by investing in both Lion One and BTU Metals 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 BTU Metals 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 BTU Metals Corp, you can compare the effects of market volatilities on Lion One and BTU Metals 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 BTU Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and BTU Metals.
Diversification Opportunities for Lion One and BTU Metals
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lion and BTU is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and BTU Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTU Metals 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 BTU Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTU Metals Corp has no effect on the direction of Lion One i.e., Lion One and BTU Metals go up and down completely randomly.
Pair Corralation between Lion One and BTU Metals
If you would invest 18.00 in Lion One Metals on November 1, 2024 and sell it today you would earn a total of 6.00 from holding Lion One Metals or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Lion One Metals vs. BTU Metals Corp
Performance |
| Timeline |
| Lion One Metals |
| BTU Metals Corp |
Lion One and BTU Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and BTU Metals
The main advantage of trading using opposite Lion One and BTU Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, BTU Metals 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 BTU Metals will offset losses from the drop in BTU Metals' long position.| Lion One vs. Irving Resources | Lion One vs. Headwater Gold | Lion One vs. Novo Resources Corp | Lion One vs. Snowline Gold Corp |
| BTU Metals vs. Western Copper and | BTU Metals vs. Procter Gamble | BTU Metals vs. Sensient Technologies | BTU Metals vs. Saia Inc |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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