Correlation Between Lion One and FEMALE HEALTH
Can any of the company-specific risk be diversified away by investing in both Lion One and FEMALE HEALTH 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 FEMALE HEALTH 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 FEMALE HEALTH, you can compare the effects of market volatilities on Lion One and FEMALE HEALTH 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 FEMALE HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and FEMALE HEALTH.
Diversification Opportunities for Lion One and FEMALE HEALTH
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lion and FEMALE is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and FEMALE HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEMALE HEALTH 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 FEMALE HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEMALE HEALTH has no effect on the direction of Lion One i.e., Lion One and FEMALE HEALTH go up and down completely randomly.
Pair Corralation between Lion One and FEMALE HEALTH
Assuming the 90 days horizon Lion One Metals is expected to generate 0.75 times more return on investment than FEMALE HEALTH. However, Lion One Metals is 1.33 times less risky than FEMALE HEALTH. It trades about -0.02 of its potential returns per unit of risk. FEMALE HEALTH is currently generating about -0.04 per unit of risk. If you would invest 52.00 in Lion One Metals on August 28, 2024 and sell it today you would lose (33.00) from holding Lion One Metals or give up 63.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion One Metals vs. FEMALE HEALTH
Performance |
| Timeline |
| Lion One Metals |
| FEMALE HEALTH |
Lion One and FEMALE HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and FEMALE HEALTH
The main advantage of trading using opposite Lion One and FEMALE HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, FEMALE HEALTH 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 FEMALE HEALTH will offset losses from the drop in FEMALE HEALTH's long position.| Lion One vs. Franco Nevada | Lion One vs. Agnico Eagle Mines | Lion One vs. Superior Plus Corp | Lion One vs. NMI Holdings |
| FEMALE HEALTH vs. GREENX METALS LTD | FEMALE HEALTH vs. Cogent Communications Holdings | FEMALE HEALTH vs. Chunghwa Telecom Co | FEMALE HEALTH vs. Mobilezone Holding 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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