Correlation Between Lion One and SWISS WATER
Can any of the company-specific risk be diversified away by investing in both Lion One and SWISS WATER 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 SWISS WATER 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 SWISS WATER DECAFFCOFFEE, you can compare the effects of market volatilities on Lion One and SWISS WATER 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 SWISS WATER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and SWISS WATER.
Diversification Opportunities for Lion One and SWISS WATER
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lion and SWISS is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and SWISS WATER DECAFFCOFFEE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SWISS WATER DECAFFCOFFEE 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 SWISS WATER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SWISS WATER DECAFFCOFFEE has no effect on the direction of Lion One i.e., Lion One and SWISS WATER go up and down completely randomly.
Pair Corralation between Lion One and SWISS WATER
Assuming the 90 days horizon Lion One Metals is expected to under-perform the SWISS WATER. In addition to that, Lion One is 1.8 times more volatile than SWISS WATER DECAFFCOFFEE. It trades about -0.12 of its total potential returns per unit of risk. SWISS WATER DECAFFCOFFEE is currently generating about -0.07 per unit of volatility. If you would invest 274.00 in SWISS WATER DECAFFCOFFEE on September 13, 2024 and sell it today you would lose (10.00) from holding SWISS WATER DECAFFCOFFEE or give up 3.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lion One Metals vs. SWISS WATER DECAFFCOFFEE
Performance |
| Timeline |
| Lion One Metals |
| SWISS WATER DECAFFCOFFEE |
Lion One and SWISS WATER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and SWISS WATER
The main advantage of trading using opposite Lion One and SWISS WATER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, SWISS WATER 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 SWISS WATER will offset losses from the drop in SWISS WATER's long position.| Lion One vs. Franco Nevada | Lion One vs. Superior Plus Corp | Lion One vs. SIVERS SEMICONDUCTORS AB | Lion One vs. Norsk Hydro ASA |
| SWISS WATER vs. COLUMBIA SPORTSWEAR | SWISS WATER vs. ALBIS LEASING AG | SWISS WATER vs. Lendlease Group | SWISS WATER vs. WILLIS LEASE FIN |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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