Correlation Between Lion One and Lerøy Seafood
Can any of the company-specific risk be diversified away by investing in both Lion One and Lerøy Seafood 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 Lerøy Seafood 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 Lery Seafood Group, you can compare the effects of market volatilities on Lion One and Lerøy Seafood 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 Lerøy Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Lerøy Seafood.
Diversification Opportunities for Lion One and Lerøy Seafood
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lion and Lerøy is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Lery Seafood Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lery Seafood Group 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 Lerøy Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lery Seafood Group has no effect on the direction of Lion One i.e., Lion One and Lerøy Seafood go up and down completely randomly.
Pair Corralation between Lion One and Lerøy Seafood
Assuming the 90 days horizon Lion One Metals is expected to under-perform the Lerøy Seafood. But the stock apears to be less risky and, when comparing its historical volatility, Lion One Metals is 1.49 times less risky than Lerøy Seafood. The stock trades about -0.07 of its potential returns per unit of risk. The Lery Seafood Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 153.00 in Lery Seafood Group on September 12, 2024 and sell it today you would earn a total of 287.00 from holding Lery Seafood Group or generate 187.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion One Metals vs. Lery Seafood Group
Performance |
| Timeline |
| Lion One Metals |
| Lery Seafood Group |
Lion One and Lerøy Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and Lerøy Seafood
The main advantage of trading using opposite Lion One and Lerøy Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, Lerøy Seafood 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 Lerøy Seafood will offset losses from the drop in Lerøy Seafood'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 |
| Lerøy Seafood vs. Mowi ASA | Lerøy Seafood vs. LEROY SEAFOOD GRUNSPADR | Lerøy Seafood vs. Yihai International Holding | Lerøy Seafood vs. Lery Seafood Group |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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