Correlation Between Lion One and Natural Health
Can any of the company-specific risk be diversified away by investing in both Lion One and Natural 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 Natural 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 Natural Health Trends, you can compare the effects of market volatilities on Lion One and Natural 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 Natural Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Natural Health.
Diversification Opportunities for Lion One and Natural Health
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lion and Natural is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Natural Health Trends in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natural Health Trends 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 Natural Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natural Health Trends has no effect on the direction of Lion One i.e., Lion One and Natural Health go up and down completely randomly.
Pair Corralation between Lion One and Natural Health
Assuming the 90 days horizon Lion One Metals is expected to generate 1.53 times more return on investment than Natural Health. However, Lion One is 1.53 times more volatile than Natural Health Trends. It trades about -0.16 of its potential returns per unit of risk. Natural Health Trends is currently generating about -0.46 per unit of risk. If you would invest 20.00 in Lion One Metals on September 12, 2024 and sell it today you would lose (3.00) from holding Lion One Metals or give up 15.0% 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. Natural Health Trends
Performance |
| Timeline |
| Lion One Metals |
| Natural Health Trends |
Lion One and Natural Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and Natural Health
The main advantage of trading using opposite Lion One and Natural Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, Natural 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 Natural Health will offset losses from the drop in Natural Health'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 |
| Natural Health vs. Lendlease Group | Natural Health vs. FUYO GENERAL LEASE | Natural Health vs. Ares Management Corp | Natural Health vs. INVITATION HOMES DL |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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