Correlation Between LION ONE and Perma Fix
Can any of the company-specific risk be diversified away by investing in both LION ONE and Perma Fix 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 Perma Fix 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 Perma Fix Environmental Services, you can compare the effects of market volatilities on LION ONE and Perma Fix 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 Perma Fix. Check out your portfolio center. Please also check ongoing floating volatility patterns of LION ONE and Perma Fix.
Diversification Opportunities for LION ONE and Perma Fix
Very weak diversification
The 3 months correlation between LION and Perma is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding LION ONE METALS and Perma Fix Environmental Servic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perma Fix Environmental 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 Perma Fix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perma Fix Environmental has no effect on the direction of LION ONE i.e., LION ONE and Perma Fix go up and down completely randomly.
Pair Corralation between LION ONE and Perma Fix
Assuming the 90 days trading horizon LION ONE METALS is expected to under-perform the Perma Fix. In addition to that, LION ONE is 1.28 times more volatile than Perma Fix Environmental Services. It trades about -0.04 of its total potential returns per unit of risk. Perma Fix Environmental Services is currently generating about 0.01 per unit of volatility. If you would invest 705.00 in Perma Fix Environmental Services on January 16, 2025 and sell it today you would lose (65.00) from holding Perma Fix Environmental Services or give up 9.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.7% |
| Values | Daily Returns |
LION ONE METALS vs. Perma Fix Environmental Servic
Performance |
| Timeline |
| LION ONE METALS |
| Perma Fix Environmental |
LION ONE and Perma Fix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LION ONE and Perma Fix
The main advantage of trading using opposite LION ONE and Perma Fix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LION ONE position performs unexpectedly, Perma Fix 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 Perma Fix will offset losses from the drop in Perma Fix's long position.The idea behind LION ONE METALS and Perma Fix Environmental Services pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Perma Fix vs. EBRO FOODS | Perma Fix vs. BG Foods | Perma Fix vs. Nomad Foods | Perma Fix vs. Collins Foods Limited |
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.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |