Correlation Between Lion One and Eskay Mining
Can any of the company-specific risk be diversified away by investing in both Lion One and Eskay Mining 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 Eskay Mining 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 Eskay Mining Corp, you can compare the effects of market volatilities on Lion One and Eskay Mining 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 Eskay Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Eskay Mining.
Diversification Opportunities for Lion One and Eskay Mining
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lion and Eskay is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Eskay Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eskay Mining 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 Eskay Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eskay Mining Corp has no effect on the direction of Lion One i.e., Lion One and Eskay Mining go up and down completely randomly.
Pair Corralation between Lion One and Eskay Mining
Assuming the 90 days horizon Lion One Metals is expected to generate 0.77 times more return on investment than Eskay Mining. However, Lion One Metals is 1.3 times less risky than Eskay Mining. It trades about -0.05 of its potential returns per unit of risk. Eskay Mining Corp is currently generating about -0.05 per unit of risk. If you would invest 37.00 in Lion One Metals on September 1, 2024 and sell it today you would lose (16.00) from holding Lion One Metals or give up 43.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion One Metals vs. Eskay Mining Corp
Performance |
| Timeline |
| Lion One Metals |
| Eskay Mining Corp |
Lion One and Eskay Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and Eskay Mining
The main advantage of trading using opposite Lion One and Eskay Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, Eskay Mining 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 Eskay Mining will offset losses from the drop in Eskay Mining'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 |
| Eskay Mining vs. Aftermath Silver | Eskay Mining vs. Group Ten Metals | Eskay Mining vs. Prime Mining Corp | Eskay Mining vs. Juggernaut Exploration |
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.
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