Correlation Between LION ONE and Takkt AG
Can any of the company-specific risk be diversified away by investing in both LION ONE and Takkt AG 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 Takkt AG 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 Takkt AG, you can compare the effects of market volatilities on LION ONE and Takkt AG 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 Takkt AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of LION ONE and Takkt AG.
Diversification Opportunities for LION ONE and Takkt AG
Weak diversification
The 3 months correlation between LION and Takkt is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding LION ONE METALS and Takkt AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Takkt AG 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 Takkt AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Takkt AG has no effect on the direction of LION ONE i.e., LION ONE and Takkt AG go up and down completely randomly.
Pair Corralation between LION ONE and Takkt AG
Assuming the 90 days trading horizon LION ONE METALS is expected to under-perform the Takkt AG. In addition to that, LION ONE is 2.91 times more volatile than Takkt AG. It trades about -0.07 of its total potential returns per unit of risk. Takkt AG is currently generating about -0.11 per unit of volatility. If you would invest 1,282 in Takkt AG on September 2, 2024 and sell it today you would lose (462.00) from holding Takkt AG or give up 36.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LION ONE METALS vs. Takkt AG
Performance |
| Timeline |
| LION ONE METALS |
| Takkt AG |
LION ONE and Takkt AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LION ONE and Takkt AG
The main advantage of trading using opposite LION ONE and Takkt AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LION ONE position performs unexpectedly, Takkt AG 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 Takkt AG will offset losses from the drop in Takkt AG's long position.| LION ONE vs. Public Storage | LION ONE vs. NTG Nordic Transport | LION ONE vs. Automatic Data Processing | LION ONE vs. Fidelity National Information |
| Takkt AG vs. SIVERS SEMICONDUCTORS AB | Takkt AG vs. Darden Restaurants | Takkt AG vs. Reliance Steel Aluminum | Takkt AG 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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