Correlation Between Lion One and Galane Gold
Can any of the company-specific risk be diversified away by investing in both Lion One and Galane Gold 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 Galane Gold 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 Galane Gold, you can compare the effects of market volatilities on Lion One and Galane Gold 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 Galane Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Galane Gold.
Diversification Opportunities for Lion One and Galane Gold
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lion and Galane is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Galane Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galane Gold 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 Galane Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galane Gold has no effect on the direction of Lion One i.e., Lion One and Galane Gold go up and down completely randomly.
Pair Corralation between Lion One and Galane Gold
Assuming the 90 days horizon Lion One Metals is expected to generate 0.67 times more return on investment than Galane Gold. However, Lion One Metals is 1.48 times less risky than Galane Gold. It trades about 0.05 of its potential returns per unit of risk. Galane Gold is currently generating about -0.04 per unit of risk. If you would invest 20.00 in Lion One Metals on October 26, 2024 and sell it today you would earn a total of 1.00 from holding Lion One Metals or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.5% |
| Values | Daily Returns |
Lion One Metals vs. Galane Gold
Performance |
| Timeline |
| Lion One Metals |
| Galane Gold |
Lion One and Galane Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and Galane Gold
The main advantage of trading using opposite Lion One and Galane Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, Galane Gold 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 Galane Gold will offset losses from the drop in Galane Gold'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 |
| Galane Gold vs. Fortuna Silver Mines | Galane Gold vs. White Gold Corp | Galane Gold vs. Maple Gold Mines | Galane Gold vs. Orogen Royalties |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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