Correlation Between LION ONE and CCL Industries
Can any of the company-specific risk be diversified away by investing in both LION ONE and CCL Industries 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 CCL Industries 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 CCL Industries, you can compare the effects of market volatilities on LION ONE and CCL Industries 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 CCL Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of LION ONE and CCL Industries.
Diversification Opportunities for LION ONE and CCL Industries
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LION and CCL is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding LION ONE METALS and CCL Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCL Industries 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 CCL Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCL Industries has no effect on the direction of LION ONE i.e., LION ONE and CCL Industries go up and down completely randomly.
Pair Corralation between LION ONE and CCL Industries
Assuming the 90 days trading horizon LION ONE METALS is expected to under-perform the CCL Industries. In addition to that, LION ONE is 3.5 times more volatile than CCL Industries. It trades about -0.06 of its total potential returns per unit of risk. CCL Industries is currently generating about 0.07 per unit of volatility. If you would invest 4,647 in CCL Industries on September 3, 2024 and sell it today you would earn a total of 553.00 from holding CCL Industries or generate 11.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LION ONE METALS vs. CCL Industries
Performance |
| Timeline |
| LION ONE METALS |
| CCL Industries |
LION ONE and CCL Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LION ONE and CCL Industries
The main advantage of trading using opposite LION ONE and CCL Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LION ONE position performs unexpectedly, CCL Industries 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 CCL Industries will offset losses from the drop in CCL Industries' long position.| LION ONE vs. HomeToGo SE | LION ONE vs. NORTHEAST UTILITIES | LION ONE vs. SBM OFFSHORE | LION ONE vs. Zijin Mining Group |
| CCL Industries vs. AptarGroup | CCL Industries vs. Superior Plus Corp | CCL Industries vs. NMI Holdings | CCL Industries vs. Origin Agritech |
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 Stocks Directory module to find actively traded stocks across global markets.
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