Correlation Between LION ONE and Elis SA
Can any of the company-specific risk be diversified away by investing in both LION ONE and Elis SA 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 Elis SA 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 Elis SA, you can compare the effects of market volatilities on LION ONE and Elis SA 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 Elis SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of LION ONE and Elis SA.
Diversification Opportunities for LION ONE and Elis SA
Average diversification
The 3 months correlation between LION and Elis is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding LION ONE METALS and Elis SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elis 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 Elis SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elis SA has no effect on the direction of LION ONE i.e., LION ONE and Elis SA go up and down completely randomly.
Pair Corralation between LION ONE and Elis SA
Assuming the 90 days trading horizon LION ONE METALS is expected to under-perform the Elis SA. In addition to that, LION ONE is 2.12 times more volatile than Elis SA. It trades about -0.06 of its total potential returns per unit of risk. Elis SA is currently generating about -0.05 per unit of volatility. If you would invest 2,296 in Elis SA on September 2, 2024 and sell it today you would lose (375.00) from holding Elis SA or give up 16.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LION ONE METALS vs. Elis SA
Performance |
| Timeline |
| LION ONE METALS |
| Elis SA |
LION ONE and Elis SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LION ONE and Elis SA
The main advantage of trading using opposite LION ONE and Elis SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LION ONE position performs unexpectedly, Elis SA 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 Elis SA will offset losses from the drop in Elis SA's long position.| LION ONE vs. Public Storage | LION ONE vs. NTG Nordic Transport | LION ONE vs. Automatic Data Processing | LION ONE vs. Fidelity National Information |
| Elis SA vs. Games Workshop Group | Elis SA vs. FRACTAL GAMING GROUP | Elis SA vs. Media and Games | Elis SA vs. GEELY AUTOMOBILE |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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