Correlation Between Lion One and TRAINLINE PLC
Can any of the company-specific risk be diversified away by investing in both Lion One and TRAINLINE PLC 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 TRAINLINE PLC 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 TRAINLINE PLC LS, you can compare the effects of market volatilities on Lion One and TRAINLINE PLC 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 TRAINLINE PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and TRAINLINE PLC.
Diversification Opportunities for Lion One and TRAINLINE PLC
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lion and TRAINLINE is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and TRAINLINE PLC LS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRAINLINE PLC LS 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 TRAINLINE PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRAINLINE PLC LS has no effect on the direction of Lion One i.e., Lion One and TRAINLINE PLC go up and down completely randomly.
Pair Corralation between Lion One and TRAINLINE PLC
Assuming the 90 days horizon Lion One Metals is expected to under-perform the TRAINLINE PLC. In addition to that, Lion One is 1.9 times more volatile than TRAINLINE PLC LS. It trades about -0.1 of its total potential returns per unit of risk. TRAINLINE PLC LS is currently generating about 0.09 per unit of volatility. If you would invest 378.00 in TRAINLINE PLC LS on September 5, 2024 and sell it today you would earn a total of 106.00 from holding TRAINLINE PLC LS or generate 28.04% 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. TRAINLINE PLC LS
Performance |
| Timeline |
| Lion One Metals |
| TRAINLINE PLC LS |
Lion One and TRAINLINE PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and TRAINLINE PLC
The main advantage of trading using opposite Lion One and TRAINLINE PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, TRAINLINE PLC 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 TRAINLINE PLC will offset losses from the drop in TRAINLINE PLC's long position.| Lion One vs. MICRONIC MYDATA | Lion One vs. Hyrican Informationssysteme Aktiengesellschaft | Lion One vs. UNITED RENTALS | Lion One vs. INFORMATION SVC GRP |
| TRAINLINE PLC vs. TRIPCOM GROUP DL 00125 | TRAINLINE PLC vs. TUI AG | TRAINLINE PLC vs. TripAdvisor | TRAINLINE PLC vs. ON THE BEACH |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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