Correlation Between Lion One and Grammer AG
Can any of the company-specific risk be diversified away by investing in both Lion One and Grammer AG 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 Grammer AG 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 Grammer AG, you can compare the effects of market volatilities on Lion One and Grammer AG 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 Grammer AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Grammer AG.
Diversification Opportunities for Lion One and Grammer AG
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lion and Grammer is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Grammer AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grammer AG 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 Grammer AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grammer AG has no effect on the direction of Lion One i.e., Lion One and Grammer AG go up and down completely randomly.
Pair Corralation between Lion One and Grammer AG
Assuming the 90 days horizon Lion One Metals is expected to under-perform the Grammer AG. In addition to that, Lion One is 1.62 times more volatile than Grammer AG. It trades about -0.03 of its total potential returns per unit of risk. Grammer AG is currently generating about -0.03 per unit of volatility. If you would invest 1,040 in Grammer AG on September 3, 2024 and sell it today you would lose (485.00) from holding Grammer AG or give up 46.63% 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. Grammer AG
Performance |
| Timeline |
| Lion One Metals |
| Grammer AG |
Lion One and Grammer AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and Grammer AG
The main advantage of trading using opposite Lion One and Grammer AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, Grammer AG 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 Grammer AG will offset losses from the drop in Grammer AG'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 |
| Grammer AG vs. Zurich Insurance Group | Grammer AG vs. Waste Management | Grammer AG vs. Ares Management Corp | Grammer AG vs. INSURANCE AUST GRP |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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