Correlation Between Lion One and Occidental Petroleum
Can any of the company-specific risk be diversified away by investing in both Lion One and Occidental Petroleum 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 Occidental Petroleum 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 Occidental Petroleum, you can compare the effects of market volatilities on Lion One and Occidental Petroleum 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 Occidental Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Occidental Petroleum.
Diversification Opportunities for Lion One and Occidental Petroleum
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lion and Occidental is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Occidental Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Occidental Petroleum 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 Occidental Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Occidental Petroleum has no effect on the direction of Lion One i.e., Lion One and Occidental Petroleum go up and down completely randomly.
Pair Corralation between Lion One and Occidental Petroleum
Assuming the 90 days horizon Lion One Metals is expected to generate 3.89 times more return on investment than Occidental Petroleum. However, Lion One is 3.89 times more volatile than Occidental Petroleum. It trades about 0.22 of its potential returns per unit of risk. Occidental Petroleum is currently generating about 0.47 per unit of risk. If you would invest 16.00 in Lion One Metals on October 20, 2024 and sell it today you would earn a total of 4.00 from holding Lion One Metals or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion One Metals vs. Occidental Petroleum
Performance |
| Timeline |
| Lion One Metals |
| Occidental Petroleum |
Lion One and Occidental Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and Occidental Petroleum
The main advantage of trading using opposite Lion One and Occidental Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, Occidental Petroleum 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 Occidental Petroleum will offset losses from the drop in Occidental Petroleum's long position.| Lion One vs. FARM 51 GROUP | Lion One vs. AGRICULTBK HADR25 YC | Lion One vs. ALEFARM BREWING DK 05 | Lion One vs. Chongqing Machinery Electric |
| Occidental Petroleum vs. Aluminum of | Occidental Petroleum vs. FIREWEED METALS P | Occidental Petroleum vs. GEAR4MUSIC LS 10 | Occidental Petroleum vs. Jacquet Metal Service |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |