Correlation Between Lion One and X-FAB Silicon
Can any of the company-specific risk be diversified away by investing in both Lion One and X-FAB Silicon 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 X-FAB Silicon 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 X FAB Silicon Foundries, you can compare the effects of market volatilities on Lion One and X-FAB Silicon 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 X-FAB Silicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and X-FAB Silicon.
Diversification Opportunities for Lion One and X-FAB Silicon
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lion and X-FAB is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and X FAB Silicon Foundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X FAB Silicon 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 X-FAB Silicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X FAB Silicon has no effect on the direction of Lion One i.e., Lion One and X-FAB Silicon go up and down completely randomly.
Pair Corralation between Lion One and X-FAB Silicon
Assuming the 90 days horizon Lion One Metals is expected to generate 1.84 times more return on investment than X-FAB Silicon. However, Lion One is 1.84 times more volatile than X FAB Silicon Foundries. It trades about -0.02 of its potential returns per unit of risk. X FAB Silicon Foundries is currently generating about -0.07 per unit of risk. If you would invest 46.00 in Lion One Metals on August 31, 2024 and sell it today you would lose (26.00) from holding Lion One Metals or give up 56.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Lion One Metals vs. X FAB Silicon Foundries
Performance |
| Timeline |
| Lion One Metals |
| X FAB Silicon |
Lion One and X-FAB Silicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and X-FAB Silicon
The main advantage of trading using opposite Lion One and X-FAB Silicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, X-FAB Silicon 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 X-FAB Silicon will offset losses from the drop in X-FAB Silicon'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 |
| X-FAB Silicon vs. WILLIS LEASE FIN | X-FAB Silicon vs. Global Ship Lease | X-FAB Silicon vs. Lion One Metals | X-FAB Silicon vs. Cleanaway Waste Management |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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