Correlation Between Lion One and AIR CHINA
Can any of the company-specific risk be diversified away by investing in both Lion One and AIR CHINA 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 AIR CHINA 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 AIR CHINA LTD, you can compare the effects of market volatilities on Lion One and AIR CHINA 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 AIR CHINA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and AIR CHINA.
Diversification Opportunities for Lion One and AIR CHINA
Very good diversification
The 3 months correlation between Lion and AIR is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and AIR CHINA LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIR CHINA LTD 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 AIR CHINA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIR CHINA LTD has no effect on the direction of Lion One i.e., Lion One and AIR CHINA go up and down completely randomly.
Pair Corralation between Lion One and AIR CHINA
Assuming the 90 days horizon Lion One Metals is expected to under-perform the AIR CHINA. In addition to that, Lion One is 1.66 times more volatile than AIR CHINA LTD. It trades about -0.03 of its total potential returns per unit of risk. AIR CHINA LTD is currently generating about -0.01 per unit of volatility. If you would invest 1,710 in AIR CHINA LTD on September 12, 2024 and sell it today you would lose (480.00) from holding AIR CHINA LTD or give up 28.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion One Metals vs. AIR CHINA LTD
Performance |
| Timeline |
| Lion One Metals |
| AIR CHINA LTD |
Lion One and AIR CHINA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and AIR CHINA
The main advantage of trading using opposite Lion One and AIR CHINA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, AIR CHINA 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 AIR CHINA will offset losses from the drop in AIR CHINA'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 |
| AIR CHINA vs. ASSOC BR FOODS | AIR CHINA vs. Lion One Metals | AIR CHINA vs. PARKEN Sport Entertainment | AIR CHINA vs. PREMIER FOODS |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |