Correlation Between LION ONE and FUYO GENERAL
Can any of the company-specific risk be diversified away by investing in both LION ONE and FUYO GENERAL 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 FUYO GENERAL 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 FUYO GENERAL LEASE, you can compare the effects of market volatilities on LION ONE and FUYO GENERAL 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 FUYO GENERAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of LION ONE and FUYO GENERAL.
Diversification Opportunities for LION ONE and FUYO GENERAL
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LION and FUYO is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding LION ONE METALS and FUYO GENERAL LEASE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUYO GENERAL LEASE 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 FUYO GENERAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUYO GENERAL LEASE has no effect on the direction of LION ONE i.e., LION ONE and FUYO GENERAL go up and down completely randomly.
Pair Corralation between LION ONE and FUYO GENERAL
Assuming the 90 days trading horizon LION ONE METALS is expected to under-perform the FUYO GENERAL. In addition to that, LION ONE is 2.66 times more volatile than FUYO GENERAL LEASE. It trades about -0.05 of its total potential returns per unit of risk. FUYO GENERAL LEASE is currently generating about 0.0 per unit of volatility. If you would invest 7,100 in FUYO GENERAL LEASE on August 28, 2024 and sell it today you would lose (250.00) from holding FUYO GENERAL LEASE or give up 3.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LION ONE METALS vs. FUYO GENERAL LEASE
Performance |
| Timeline |
| LION ONE METALS |
| FUYO GENERAL LEASE |
LION ONE and FUYO GENERAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LION ONE and FUYO GENERAL
The main advantage of trading using opposite LION ONE and FUYO GENERAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LION ONE position performs unexpectedly, FUYO GENERAL 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 FUYO GENERAL will offset losses from the drop in FUYO GENERAL's long position.The idea behind LION ONE METALS and FUYO GENERAL LEASE 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.| FUYO GENERAL vs. Superior Plus Corp | FUYO GENERAL vs. NMI Holdings | FUYO GENERAL vs. Origin Agritech | FUYO GENERAL vs. SIVERS SEMICONDUCTORS AB |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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