Correlation Between Lion One and AUST AGRICULTURAL
Can any of the company-specific risk be diversified away by investing in both Lion One and AUST AGRICULTURAL 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 AUST AGRICULTURAL 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 AUST AGRICULTURAL, you can compare the effects of market volatilities on Lion One and AUST AGRICULTURAL 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 AUST AGRICULTURAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and AUST AGRICULTURAL.
Diversification Opportunities for Lion One and AUST AGRICULTURAL
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lion and AUST is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and AUST AGRICULTURAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUST AGRICULTURAL 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 AUST AGRICULTURAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUST AGRICULTURAL has no effect on the direction of Lion One i.e., Lion One and AUST AGRICULTURAL go up and down completely randomly.
Pair Corralation between Lion One and AUST AGRICULTURAL
Assuming the 90 days horizon Lion One Metals is expected to under-perform the AUST AGRICULTURAL. In addition to that, Lion One is 3.92 times more volatile than AUST AGRICULTURAL. It trades about -0.1 of its total potential returns per unit of risk. AUST AGRICULTURAL is currently generating about 0.12 per unit of volatility. If you would invest 81.00 in AUST AGRICULTURAL on September 2, 2024 and sell it today you would earn a total of 2.00 from holding AUST AGRICULTURAL or generate 2.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion One Metals vs. AUST AGRICULTURAL
Performance |
| Timeline |
| Lion One Metals |
| AUST AGRICULTURAL |
Lion One and AUST AGRICULTURAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and AUST AGRICULTURAL
The main advantage of trading using opposite Lion One and AUST AGRICULTURAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, AUST AGRICULTURAL 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 AUST AGRICULTURAL will offset losses from the drop in AUST AGRICULTURAL's long position.| Lion One vs. ZIJIN MINH UNSPADR20 | Lion One vs. Superior Plus Corp | Lion One vs. NMI Holdings | Lion One vs. Origin Agritech |
| AUST AGRICULTURAL vs. SIVERS SEMICONDUCTORS AB | AUST AGRICULTURAL vs. Darden Restaurants | AUST AGRICULTURAL vs. Reliance Steel Aluminum | AUST AGRICULTURAL vs. Q2M Managementberatung AG |
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.
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