Correlation Between LION ONE and CN MODERN
Can any of the company-specific risk be diversified away by investing in both LION ONE and CN MODERN 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 CN MODERN 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 CN MODERN DAIRY, you can compare the effects of market volatilities on LION ONE and CN MODERN 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 CN MODERN. Check out your portfolio center. Please also check ongoing floating volatility patterns of LION ONE and CN MODERN.
Diversification Opportunities for LION ONE and CN MODERN
Very weak diversification
The 3 months correlation between LION and 07M is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding LION ONE METALS and CN MODERN DAIRY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CN MODERN DAIRY 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 CN MODERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CN MODERN DAIRY has no effect on the direction of LION ONE i.e., LION ONE and CN MODERN go up and down completely randomly.
Pair Corralation between LION ONE and CN MODERN
Assuming the 90 days trading horizon LION ONE METALS is expected to under-perform the CN MODERN. In addition to that, LION ONE is 1.82 times more volatile than CN MODERN DAIRY. It trades about -0.07 of its total potential returns per unit of risk. CN MODERN DAIRY is currently generating about 0.07 per unit of volatility. If you would invest 6.56 in CN MODERN DAIRY on August 29, 2024 and sell it today you would earn a total of 2.59 from holding CN MODERN DAIRY or generate 39.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.53% |
| Values | Daily Returns |
LION ONE METALS vs. CN MODERN DAIRY
Performance |
| Timeline |
| LION ONE METALS |
| CN MODERN DAIRY |
LION ONE and CN MODERN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LION ONE and CN MODERN
The main advantage of trading using opposite LION ONE and CN MODERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LION ONE position performs unexpectedly, CN MODERN 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 CN MODERN will offset losses from the drop in CN MODERN's long position.| LION ONE vs. Apple Inc | LION ONE vs. Apple Inc | LION ONE vs. Superior Plus Corp | LION ONE vs. SIVERS SEMICONDUCTORS AB |
| CN MODERN vs. Apple Inc | CN MODERN vs. Apple Inc | CN MODERN vs. Superior Plus Corp | CN MODERN vs. SIVERS SEMICONDUCTORS AB |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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