Correlation Between LION ONE and KLA
Can any of the company-specific risk be diversified away by investing in both LION ONE and KLA 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 KLA 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 KLA Corporation, you can compare the effects of market volatilities on LION ONE and KLA 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 KLA. Check out your portfolio center. Please also check ongoing floating volatility patterns of LION ONE and KLA.
Diversification Opportunities for LION ONE and KLA
Modest diversification
The 3 months correlation between LION and KLA is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding LION ONE METALS and KLA Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KLA Corporation 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 KLA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KLA Corporation has no effect on the direction of LION ONE i.e., LION ONE and KLA go up and down completely randomly.
Pair Corralation between LION ONE and KLA
Assuming the 90 days trading horizon LION ONE METALS is expected to under-perform the KLA. In addition to that, LION ONE is 1.63 times more volatile than KLA Corporation. It trades about -0.08 of its total potential returns per unit of risk. KLA Corporation is currently generating about 0.05 per unit of volatility. If you would invest 48,874 in KLA Corporation on September 5, 2024 and sell it today you would earn a total of 12,486 from holding KLA Corporation or generate 25.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
LION ONE METALS vs. KLA Corp.
Performance |
| Timeline |
| LION ONE METALS |
| KLA Corporation |
LION ONE and KLA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LION ONE and KLA
The main advantage of trading using opposite LION ONE and KLA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LION ONE position performs unexpectedly, KLA 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 KLA will offset losses from the drop in KLA's long position.| LION ONE vs. Jacquet Metal Service | LION ONE vs. Corsair Gaming | LION ONE vs. Pembina Pipeline Corp | LION ONE vs. DELTA AIR LINES |
| KLA vs. MOLSON RS BEVERAGE | KLA vs. ZURICH INSURANCE GROUP | KLA vs. Algonquin Power Utilities | KLA vs. United Utilities Group |
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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