Correlation Between LION ONE and Gossan Resources
Can any of the company-specific risk be diversified away by investing in both LION ONE and Gossan Resources 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 Gossan Resources 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 Gossan Resources, you can compare the effects of market volatilities on LION ONE and Gossan Resources 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 Gossan Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of LION ONE and Gossan Resources.
Diversification Opportunities for LION ONE and Gossan Resources
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LION and Gossan is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding LION ONE METALS and Gossan Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gossan Resources 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 Gossan Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gossan Resources has no effect on the direction of LION ONE i.e., LION ONE and Gossan Resources go up and down completely randomly.
Pair Corralation between LION ONE and Gossan Resources
Assuming the 90 days trading horizon LION ONE METALS is expected to under-perform the Gossan Resources. But the stock apears to be less risky and, when comparing its historical volatility, LION ONE METALS is 12.13 times less risky than Gossan Resources. The stock trades about -0.04 of its potential returns per unit of risk. The Gossan Resources is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2.45 in Gossan Resources on November 27, 2024 and sell it today you would lose (1.70) from holding Gossan Resources or give up 69.39% 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. Gossan Resources
Performance |
| Timeline |
| LION ONE METALS |
| Gossan Resources |
LION ONE and Gossan Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LION ONE and Gossan Resources
The main advantage of trading using opposite LION ONE and Gossan Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LION ONE position performs unexpectedly, Gossan Resources 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 Gossan Resources will offset losses from the drop in Gossan Resources' long position.| LION ONE vs. ANGLO ASIAN MINING | LION ONE vs. Platinum Investment Management | LION ONE vs. Aya Gold Silver | LION ONE vs. Monument Mining Limited |
| Gossan Resources vs. NORTHEAST UTILITIES | Gossan Resources vs. EBRO FOODS | Gossan Resources vs. PATTIES FOODS | Gossan Resources vs. COFCO Joycome Foods |
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 CEOs Directory module to screen CEOs from public companies around the world.
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