Correlation Between Lion One and Aristocrat Leisure
Can any of the company-specific risk be diversified away by investing in both Lion One and Aristocrat Leisure 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 Aristocrat Leisure 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 Aristocrat Leisure Limited, you can compare the effects of market volatilities on Lion One and Aristocrat Leisure 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 Aristocrat Leisure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Aristocrat Leisure.
Diversification Opportunities for Lion One and Aristocrat Leisure
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lion and Aristocrat is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Aristocrat Leisure Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aristocrat Leisure 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 Aristocrat Leisure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aristocrat Leisure has no effect on the direction of Lion One i.e., Lion One and Aristocrat Leisure go up and down completely randomly.
Pair Corralation between Lion One and Aristocrat Leisure
Assuming the 90 days horizon Lion One Metals is expected to under-perform the Aristocrat Leisure. In addition to that, Lion One is 2.92 times more volatile than Aristocrat Leisure Limited. It trades about -0.06 of its total potential returns per unit of risk. Aristocrat Leisure Limited is currently generating about 0.14 per unit of volatility. If you would invest 2,306 in Aristocrat Leisure Limited on September 3, 2024 and sell it today you would earn a total of 1,854 from holding Aristocrat Leisure Limited or generate 80.4% 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. Aristocrat Leisure Limited
Performance |
| Timeline |
| Lion One Metals |
| Aristocrat Leisure |
Lion One and Aristocrat Leisure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and Aristocrat Leisure
The main advantage of trading using opposite Lion One and Aristocrat Leisure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, Aristocrat Leisure 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 Aristocrat Leisure will offset losses from the drop in Aristocrat Leisure's long position.| Lion One vs. Cars Inc | Lion One vs. Chunghwa Telecom Co | Lion One vs. United Internet AG | Lion One vs. JAPAN TOBACCO UNSPADR12 |
| Aristocrat Leisure vs. Boiron SA | Aristocrat Leisure vs. Darden Restaurants | Aristocrat Leisure vs. SWISS WATER DECAFFCOFFEE | Aristocrat Leisure vs. Lion One Metals |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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