Correlation Between LION ONE and Techtronic Industries
Can any of the company-specific risk be diversified away by investing in both LION ONE and Techtronic Industries 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 Techtronic Industries 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 Techtronic Industries, you can compare the effects of market volatilities on LION ONE and Techtronic Industries 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 Techtronic Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of LION ONE and Techtronic Industries.
Diversification Opportunities for LION ONE and Techtronic Industries
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between LION and Techtronic is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding LION ONE METALS and Techtronic Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Techtronic Industries 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 Techtronic Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Techtronic Industries has no effect on the direction of LION ONE i.e., LION ONE and Techtronic Industries go up and down completely randomly.
Pair Corralation between LION ONE and Techtronic Industries
Assuming the 90 days trading horizon LION ONE METALS is expected to under-perform the Techtronic Industries. In addition to that, LION ONE is 1.92 times more volatile than Techtronic Industries. It trades about -0.17 of its total potential returns per unit of risk. Techtronic Industries is currently generating about 0.06 per unit of volatility. If you would invest 1,245 in Techtronic Industries on September 17, 2024 and sell it today you would earn a total of 31.00 from holding Techtronic Industries or generate 2.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LION ONE METALS vs. Techtronic Industries
Performance |
| Timeline |
| LION ONE METALS |
| Techtronic Industries |
LION ONE and Techtronic Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LION ONE and Techtronic Industries
The main advantage of trading using opposite LION ONE and Techtronic Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LION ONE position performs unexpectedly, Techtronic Industries 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 Techtronic Industries will offset losses from the drop in Techtronic Industries' long position.The idea behind LION ONE METALS and Techtronic Industries 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.| Techtronic Industries vs. INSURANCE AUST GRP | Techtronic Industries vs. LION ONE METALS | Techtronic Industries vs. Ping An Insurance | Techtronic Industries vs. MCEWEN MINING INC |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |