Correlation Between Themac Resources and Lion One
Can any of the company-specific risk be diversified away by investing in both Themac Resources and Lion One 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 Themac Resources and Lion One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Themac Resources Group and Lion One Metals, you can compare the effects of market volatilities on Themac Resources and Lion One 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 Themac Resources with a short position of Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Themac Resources and Lion One.
Diversification Opportunities for Themac Resources and Lion One
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Themac and Lion is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Themac Resources Group and Lion One Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion One Metals and Themac Resources 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 Themac Resources Group are associated (or correlated) with Lion One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion One Metals has no effect on the direction of Themac Resources i.e., Themac Resources and Lion One go up and down completely randomly.
Pair Corralation between Themac Resources and Lion One
Assuming the 90 days horizon Themac Resources Group is expected to generate 2.66 times more return on investment than Lion One. However, Themac Resources is 2.66 times more volatile than Lion One Metals. It trades about 0.04 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.08 per unit of risk. If you would invest 4.00 in Themac Resources Group on September 2, 2024 and sell it today you would lose (1.00) from holding Themac Resources Group or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Themac Resources Group vs. Lion One Metals
Performance |
| Timeline |
| Themac Resources |
| Lion One Metals |
Themac Resources and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Themac Resources and Lion One
The main advantage of trading using opposite Themac Resources and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Themac Resources position performs unexpectedly, Lion One 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 Lion One will offset losses from the drop in Lion One's long position.| Themac Resources vs. Arbor Metals Corp | Themac Resources vs. Cogeco Communications | Themac Resources vs. Talon Metals Corp | Themac Resources vs. InPlay Oil Corp |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |