Correlation Between Lion One and Digi International
Can any of the company-specific risk be diversified away by investing in both Lion One and Digi International 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 Digi International 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 Digi International, you can compare the effects of market volatilities on Lion One and Digi International 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 Digi International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Digi International.
Diversification Opportunities for Lion One and Digi International
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lion and Digi is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Digi International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digi International 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 Digi International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digi International has no effect on the direction of Lion One i.e., Lion One and Digi International go up and down completely randomly.
Pair Corralation between Lion One and Digi International
Assuming the 90 days horizon Lion One Metals is expected to under-perform the Digi International. In addition to that, Lion One is 1.55 times more volatile than Digi International. It trades about -0.13 of its total potential returns per unit of risk. Digi International is currently generating about 0.17 per unit of volatility. If you would invest 2,693 in Digi International on September 20, 2024 and sell it today you would earn a total of 618.00 from holding Digi International or generate 22.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion One Metals vs. Digi International
Performance |
| Timeline |
| Lion One Metals |
| Digi International |
Lion One and Digi International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and Digi International
The main advantage of trading using opposite Lion One and Digi International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, Digi International 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 Digi International will offset losses from the drop in Digi International'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 |
| Digi International vs. Passage Bio | Digi International vs. Black Diamond Therapeutics | Digi International vs. Alector | Digi International vs. Century Therapeutics |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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