Correlation Between Lion One and Western Copper
Can any of the company-specific risk be diversified away by investing in both Lion One and Western Copper 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 Western Copper 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 Western Copper and, you can compare the effects of market volatilities on Lion One and Western Copper 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 Western Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Western Copper.
Diversification Opportunities for Lion One and Western Copper
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lion and Western is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Western Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Copper 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 Western Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Copper has no effect on the direction of Lion One i.e., Lion One and Western Copper go up and down completely randomly.
Pair Corralation between Lion One and Western Copper
Assuming the 90 days horizon Lion One Metals is expected to under-perform the Western Copper. But the stock apears to be less risky and, when comparing its historical volatility, Lion One Metals is 1.34 times less risky than Western Copper. The stock trades about -0.09 of its potential returns per unit of risk. The Western Copper and is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 103.00 in Western Copper and on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Western Copper and or generate 0.0% 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. Western Copper and
Performance |
| Timeline |
| Lion One Metals |
| Western Copper |
Lion One and Western Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and Western Copper
The main advantage of trading using opposite Lion One and Western Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, Western Copper 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 Western Copper will offset losses from the drop in Western Copper's long position.| Lion One vs. British American Tobacco | Lion One vs. GREENX METALS LTD | Lion One vs. Scandinavian Tobacco Group | Lion One vs. ADRIATIC METALS LS 013355 |
| Western Copper vs. American Airlines Group | Western Copper vs. Air Transport Services | Western Copper vs. Texas Roadhouse | Western Copper vs. Gol Intelligent Airlines |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |