Correlation Between Lion One and H FARM
Can any of the company-specific risk be diversified away by investing in both Lion One and H FARM 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 H FARM 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 H FARM SPA, you can compare the effects of market volatilities on Lion One and H FARM 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 H FARM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and H FARM.
Diversification Opportunities for Lion One and H FARM
Weak diversification
The 3 months correlation between Lion and 5JQ is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and H FARM SPA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H FARM SPA 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 H FARM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H FARM SPA has no effect on the direction of Lion One i.e., Lion One and H FARM go up and down completely randomly.
Pair Corralation between Lion One and H FARM
Assuming the 90 days horizon Lion One Metals is expected to generate 0.72 times more return on investment than H FARM. However, Lion One Metals is 1.39 times less risky than H FARM. It trades about -0.05 of its potential returns per unit of risk. H FARM SPA is currently generating about -0.12 per unit of risk. If you would invest 20.00 in Lion One Metals on September 4, 2024 and sell it today you would lose (1.00) from holding Lion One Metals or give up 5.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lion One Metals vs. H FARM SPA
Performance |
| Timeline |
| Lion One Metals |
| H FARM SPA |
Lion One and H FARM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and H FARM
The main advantage of trading using opposite Lion One and H FARM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, H FARM 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 H FARM will offset losses from the drop in H FARM's long position.| Lion One vs. HEALTHCARE REAL A | Lion One vs. Goosehead Insurance | Lion One vs. INSURANCE AUST GRP | Lion One vs. SBI Insurance Group |
| H FARM vs. Blackstone Group | H FARM vs. BlackRock | H FARM vs. The Bank of | H FARM vs. Ameriprise Financial |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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