Correlation Between Lion One and Stepan
Can any of the company-specific risk be diversified away by investing in both Lion One and Stepan 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 Stepan 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 Stepan Company, you can compare the effects of market volatilities on Lion One and Stepan 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 Stepan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Stepan.
Diversification Opportunities for Lion One and Stepan
Good diversification
The 3 months correlation between Lion and Stepan is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Stepan Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepan Company 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 Stepan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stepan Company has no effect on the direction of Lion One i.e., Lion One and Stepan go up and down completely randomly.
Pair Corralation between Lion One and Stepan
Assuming the 90 days horizon Lion One Metals is expected to under-perform the Stepan. In addition to that, Lion One is 1.26 times more volatile than Stepan Company. It trades about -0.24 of its total potential returns per unit of risk. Stepan Company is currently generating about 0.05 per unit of volatility. If you would invest 7,445 in Stepan Company on August 31, 2024 and sell it today you would earn a total of 164.00 from holding Stepan Company or generate 2.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion One Metals vs. Stepan Company
Performance |
| Timeline |
| Lion One Metals |
| Stepan Company |
Lion One and Stepan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and Stepan
The main advantage of trading using opposite Lion One and Stepan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, Stepan 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 Stepan will offset losses from the drop in Stepan'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 |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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