Correlation Between LION ONE and Insulet
Can any of the company-specific risk be diversified away by investing in both LION ONE and Insulet 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 Insulet 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 Insulet, you can compare the effects of market volatilities on LION ONE and Insulet 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 Insulet. Check out your portfolio center. Please also check ongoing floating volatility patterns of LION ONE and Insulet.
Diversification Opportunities for LION ONE and Insulet
Pay attention - limited upside
The 3 months correlation between LION and Insulet is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding LION ONE METALS and Insulet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insulet 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 Insulet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insulet has no effect on the direction of LION ONE i.e., LION ONE and Insulet go up and down completely randomly.
Pair Corralation between LION ONE and Insulet
Assuming the 90 days trading horizon LION ONE METALS is expected to under-perform the Insulet. In addition to that, LION ONE is 1.76 times more volatile than Insulet. It trades about -0.05 of its total potential returns per unit of risk. Insulet is currently generating about 0.01 per unit of volatility. If you would invest 26,280 in Insulet on September 25, 2024 and sell it today you would lose (1,780) from holding Insulet or give up 6.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LION ONE METALS vs. Insulet
Performance |
| Timeline |
| LION ONE METALS |
| Insulet |
LION ONE and Insulet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LION ONE and Insulet
The main advantage of trading using opposite LION ONE and Insulet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LION ONE position performs unexpectedly, Insulet 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 Insulet will offset losses from the drop in Insulet's long position.| LION ONE vs. Boyd Gaming | LION ONE vs. ANGLER GAMING PLC | LION ONE vs. CI GAMES SA | LION ONE vs. EAST SIDE GAMES |
| Insulet vs. DATANG INTL POW | Insulet vs. Fidelity National Information | Insulet vs. MagnaChip Semiconductor Corp | Insulet vs. Datang International Power |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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