Correlation Between Lion One and Marine Products
Can any of the company-specific risk be diversified away by investing in both Lion One and Marine Products 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 Marine Products 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 Marine Products, you can compare the effects of market volatilities on Lion One and Marine Products 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 Marine Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Marine Products.
Diversification Opportunities for Lion One and Marine Products
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lion and Marine is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Marine Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marine Products 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 Marine Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marine Products has no effect on the direction of Lion One i.e., Lion One and Marine Products go up and down completely randomly.
Pair Corralation between Lion One and Marine Products
Assuming the 90 days horizon Lion One Metals is expected to under-perform the Marine Products. In addition to that, Lion One is 1.67 times more volatile than Marine Products. It trades about -0.35 of its total potential returns per unit of risk. Marine Products is currently generating about 0.25 per unit of volatility. If you would invest 937.00 in Marine Products on August 28, 2024 and sell it today you would earn a total of 84.00 from holding Marine Products or generate 8.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion One Metals vs. Marine Products
Performance |
| Timeline |
| Lion One Metals |
| Marine Products |
Lion One and Marine Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and Marine Products
The main advantage of trading using opposite Lion One and Marine Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, Marine Products 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 Marine Products will offset losses from the drop in Marine Products' long position.| Lion One vs. Ascendant Resources | Lion One vs. Cantex Mine Development | Lion One vs. Amarc Resources | Lion One vs. Sterling Metals Corp |
| Marine Products vs. Thor Industries | Marine Products vs. BRP Inc | Marine Products vs. Brunswick | Marine Products vs. EZGO Technologies |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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