Correlation Between LION ONE and Neinor Homes
Can any of the company-specific risk be diversified away by investing in both LION ONE and Neinor Homes 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 Neinor Homes 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 Neinor Homes SA, you can compare the effects of market volatilities on LION ONE and Neinor Homes 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 Neinor Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of LION ONE and Neinor Homes.
Diversification Opportunities for LION ONE and Neinor Homes
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LION and Neinor is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding LION ONE METALS and Neinor Homes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neinor Homes SA 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 Neinor Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neinor Homes SA has no effect on the direction of LION ONE i.e., LION ONE and Neinor Homes go up and down completely randomly.
Pair Corralation between LION ONE and Neinor Homes
Assuming the 90 days trading horizon LION ONE METALS is expected to under-perform the Neinor Homes. In addition to that, LION ONE is 2.46 times more volatile than Neinor Homes SA. It trades about -0.03 of its total potential returns per unit of risk. Neinor Homes SA is currently generating about 0.09 per unit of volatility. If you would invest 733.00 in Neinor Homes SA on December 4, 2024 and sell it today you would earn a total of 801.00 from holding Neinor Homes SA or generate 109.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
LION ONE METALS vs. Neinor Homes SA
Performance |
| Timeline |
| LION ONE METALS |
| Neinor Homes SA |
LION ONE and Neinor Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LION ONE and Neinor Homes
The main advantage of trading using opposite LION ONE and Neinor Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LION ONE position performs unexpectedly, Neinor Homes 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 Neinor Homes will offset losses from the drop in Neinor Homes' long position.| LION ONE vs. Datang International Power | LION ONE vs. Fast Retailing Co | LION ONE vs. Alliance Data Systems | LION ONE vs. Linedata Services SA |
| Neinor Homes vs. Suntory Beverage Food | Neinor Homes vs. China Resources Beer | Neinor Homes vs. ScanSource | Neinor Homes vs. American Homes 4 |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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