Correlation Between LION ONE and EHEALTH
Can any of the company-specific risk be diversified away by investing in both LION ONE and EHEALTH 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 EHEALTH 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 EHEALTH, you can compare the effects of market volatilities on LION ONE and EHEALTH 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 EHEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of LION ONE and EHEALTH.
Diversification Opportunities for LION ONE and EHEALTH
Modest diversification
The 3 months correlation between LION and EHEALTH is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding LION ONE METALS and EHEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EHEALTH 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 EHEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EHEALTH has no effect on the direction of LION ONE i.e., LION ONE and EHEALTH go up and down completely randomly.
Pair Corralation between LION ONE and EHEALTH
Assuming the 90 days trading horizon LION ONE METALS is expected to under-perform the EHEALTH. In addition to that, LION ONE is 1.02 times more volatile than EHEALTH. It trades about -0.23 of its total potential returns per unit of risk. EHEALTH is currently generating about 0.05 per unit of volatility. If you would invest 460.00 in EHEALTH on August 27, 2024 and sell it today you would earn a total of 13.00 from holding EHEALTH or generate 2.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LION ONE METALS vs. EHEALTH
Performance |
| Timeline |
| LION ONE METALS |
| EHEALTH |
LION ONE and EHEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LION ONE and EHEALTH
The main advantage of trading using opposite LION ONE and EHEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LION ONE position performs unexpectedly, EHEALTH 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 EHEALTH will offset losses from the drop in EHEALTH's long position.| LION ONE vs. Austevoll Seafood ASA | LION ONE vs. TreeHouse Foods | LION ONE vs. National Retail Properties | LION ONE vs. AIR PRODCHEMICALS |
| EHEALTH vs. FUYO GENERAL LEASE | EHEALTH vs. EAGLE MATERIALS | EHEALTH vs. Fast Retailing Co | EHEALTH vs. Lendlease 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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