Correlation Between Lion One and SPARTAN STORES
Can any of the company-specific risk be diversified away by investing in both Lion One and SPARTAN STORES 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 SPARTAN STORES 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 SPARTAN STORES, you can compare the effects of market volatilities on Lion One and SPARTAN STORES 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 SPARTAN STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and SPARTAN STORES.
Diversification Opportunities for Lion One and SPARTAN STORES
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lion and SPARTAN is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and SPARTAN STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPARTAN STORES 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 SPARTAN STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPARTAN STORES has no effect on the direction of Lion One i.e., Lion One and SPARTAN STORES go up and down completely randomly.
Pair Corralation between Lion One and SPARTAN STORES
Assuming the 90 days horizon Lion One Metals is expected to under-perform the SPARTAN STORES. In addition to that, Lion One is 2.54 times more volatile than SPARTAN STORES. It trades about -0.03 of its total potential returns per unit of risk. SPARTAN STORES is currently generating about 0.0 per unit of volatility. If you would invest 1,926 in SPARTAN STORES on September 2, 2024 and sell it today you would lose (146.00) from holding SPARTAN STORES or give up 7.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion One Metals vs. SPARTAN STORES
Performance |
| Timeline |
| Lion One Metals |
| SPARTAN STORES |
Lion One and SPARTAN STORES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and SPARTAN STORES
The main advantage of trading using opposite Lion One and SPARTAN STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, SPARTAN STORES 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 SPARTAN STORES will offset losses from the drop in SPARTAN STORES's long position.| Lion One vs. ZIJIN MINH UNSPADR20 | Lion One vs. Superior Plus Corp | Lion One vs. NMI Holdings | Lion One vs. Origin Agritech |
| SPARTAN STORES vs. SIVERS SEMICONDUCTORS AB | SPARTAN STORES vs. Darden Restaurants | SPARTAN STORES vs. Reliance Steel Aluminum | SPARTAN STORES vs. Q2M Managementberatung 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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