Correlation Between LION ONE and NH HOTEL
Can any of the company-specific risk be diversified away by investing in both LION ONE and NH HOTEL 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 NH HOTEL 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 NH HOTEL GROUP, you can compare the effects of market volatilities on LION ONE and NH HOTEL 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 NH HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of LION ONE and NH HOTEL.
Diversification Opportunities for LION ONE and NH HOTEL
Very weak diversification
The 3 months correlation between LION and NH5 is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding LION ONE METALS and NH HOTEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH HOTEL GROUP 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 NH HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH HOTEL GROUP has no effect on the direction of LION ONE i.e., LION ONE and NH HOTEL go up and down completely randomly.
Pair Corralation between LION ONE and NH HOTEL
Assuming the 90 days trading horizon LION ONE METALS is expected to under-perform the NH HOTEL. In addition to that, LION ONE is 1.43 times more volatile than NH HOTEL GROUP. It trades about -0.07 of its total potential returns per unit of risk. NH HOTEL GROUP is currently generating about 0.02 per unit of volatility. If you would invest 383.00 in NH HOTEL GROUP on September 1, 2024 and sell it today you would earn a total of 28.00 from holding NH HOTEL GROUP or generate 7.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LION ONE METALS vs. NH HOTEL GROUP
Performance |
| Timeline |
| LION ONE METALS |
| NH HOTEL GROUP |
LION ONE and NH HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LION ONE and NH HOTEL
The main advantage of trading using opposite LION ONE and NH HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LION ONE position performs unexpectedly, NH HOTEL 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 NH HOTEL will offset losses from the drop in NH HOTEL's long position.| LION ONE vs. Corporate Office Properties | LION ONE vs. Eagle Materials | LION ONE vs. Plastic Omnium | LION ONE vs. KENEDIX OFFICE INV |
| NH HOTEL vs. SIVERS SEMICONDUCTORS AB | NH HOTEL vs. Darden Restaurants | NH HOTEL vs. Reliance Steel Aluminum | NH HOTEL vs. Q2M Managementberatung AG |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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