Correlation Between Lion One and 2G ENERGY
Can any of the company-specific risk be diversified away by investing in both Lion One and 2G ENERGY 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 2G ENERGY 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 2G ENERGY , you can compare the effects of market volatilities on Lion One and 2G ENERGY 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 2G ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and 2G ENERGY.
Diversification Opportunities for Lion One and 2G ENERGY
Very weak diversification
The 3 months correlation between Lion and 2GB is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and 2G ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 2G ENERGY 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 2G ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 2G ENERGY has no effect on the direction of Lion One i.e., Lion One and 2G ENERGY go up and down completely randomly.
Pair Corralation between Lion One and 2G ENERGY
Assuming the 90 days horizon Lion One Metals is expected to under-perform the 2G ENERGY. In addition to that, Lion One is 2.36 times more volatile than 2G ENERGY . It trades about -0.05 of its total potential returns per unit of risk. 2G ENERGY is currently generating about 0.01 per unit of volatility. If you would invest 2,255 in 2G ENERGY on September 1, 2024 and sell it today you would lose (60.00) from holding 2G ENERGY or give up 2.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.64% |
| Values | Daily Returns |
Lion One Metals vs. 2G ENERGY
Performance |
| Timeline |
| Lion One Metals |
| 2G ENERGY |
Lion One and 2G ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and 2G ENERGY
The main advantage of trading using opposite Lion One and 2G ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, 2G ENERGY 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 2G ENERGY will offset losses from the drop in 2G ENERGY's long position.| Lion One vs. NIPPON STEEL SPADR | Lion One vs. United States Steel | Lion One vs. Nippon Steel | Lion One vs. Singapore Telecommunications Limited |
| 2G ENERGY vs. Australian Agricultural | 2G ENERGY vs. Ultra Clean Holdings | 2G ENERGY vs. Charter Communications | 2G ENERGY vs. Consolidated Communications Holdings |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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