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 -0.62. 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 generate 2.28 times more return on investment than Ambea AB. However, LION ONE is 2.28 times more volatile than Ambea AB. It trades about 0.27 of its potential returns per unit of risk. Ambea AB is currently generating about -0.1 per unit of risk. If you would invest 18.00 in LION ONE METALS on November 2, 2024 and sell it today you would earn a total of 6.00 from holding LION ONE METALS or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| 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.| LION ONE vs. S E BANKEN A | LION ONE vs. Dairy Farm International | LION ONE vs. CHIBA BANK | LION ONE vs. Chiba Bank |
| Ambea AB vs. Sonic Healthcare Limited | Ambea AB vs. Superior Plus Corp | Ambea AB vs. Origin Agritech | Ambea AB vs. Identiv |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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