Correlation Between LION ONE and Ambea AB
Can any of the company-specific risk be diversified away by investing in both LION ONE and Ambea AB 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 Ambea AB 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 Ambea AB, you can compare the effects of market volatilities on LION ONE and Ambea AB 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 Ambea AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of LION ONE and Ambea AB.
Diversification Opportunities for LION ONE and Ambea AB
Excellent diversification
The 3 months correlation between LION and Ambea is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding LION ONE METALS and Ambea AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambea AB 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 Ambea AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambea AB has no effect on the direction of LION ONE i.e., LION ONE and Ambea AB go up and down completely randomly.
Pair Corralation between LION ONE and Ambea AB
Assuming the 90 days trading horizon LION ONE METALS is expected to under-perform the Ambea AB. In addition to that, LION ONE is 2.21 times more volatile than Ambea AB. It trades about -0.05 of its total potential returns per unit of risk. Ambea AB is currently generating about 0.12 per unit of volatility. If you would invest 768.00 in Ambea AB on September 12, 2024 and sell it today you would earn a total of 105.00 from holding Ambea AB or generate 13.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
LION ONE METALS vs. Ambea AB
Performance |
| Timeline |
| LION ONE METALS |
| Ambea AB |
LION ONE and Ambea AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LION ONE and Ambea AB
The main advantage of trading using opposite LION ONE and Ambea AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LION ONE position performs unexpectedly, Ambea AB 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 Ambea AB will offset losses from the drop in Ambea AB's long position.The idea behind LION ONE METALS and Ambea AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Ambea AB vs. LION ONE METALS | Ambea AB vs. SERI INDUSTRIAL EO | Ambea AB vs. ADRIATIC METALS LS 013355 | Ambea AB vs. MCEWEN MINING INC |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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