Correlation Between Lion One and Gold Road
Can any of the company-specific risk be diversified away by investing in both Lion One and Gold Road 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 Gold Road 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 Gold Road Resources, you can compare the effects of market volatilities on Lion One and Gold Road 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 Gold Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Gold Road.
Diversification Opportunities for Lion One and Gold Road
Good diversification
The 3 months correlation between Lion and Gold is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Gold Road Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Road Resources 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 Gold Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Road Resources has no effect on the direction of Lion One i.e., Lion One and Gold Road go up and down completely randomly.
Pair Corralation between Lion One and Gold Road
Assuming the 90 days horizon Lion One Metals is expected to under-perform the Gold Road. In addition to that, Lion One is 1.46 times more volatile than Gold Road Resources. It trades about -0.12 of its total potential returns per unit of risk. Gold Road Resources is currently generating about 0.37 per unit of volatility. If you would invest 106.00 in Gold Road Resources on September 13, 2024 and sell it today you would earn a total of 24.00 from holding Gold Road Resources or generate 22.64% 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. Gold Road Resources
Performance |
| Timeline |
| Lion One Metals |
| Gold Road Resources |
Lion One and Gold Road Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and Gold Road
The main advantage of trading using opposite Lion One and Gold Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, Gold Road 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 Gold Road will offset losses from the drop in Gold Road'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 |
| Gold Road vs. Franco Nevada | Gold Road vs. Superior Plus Corp | Gold Road vs. SIVERS SEMICONDUCTORS AB | Gold Road vs. Norsk Hydro ASA |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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