Correlation Between Marimaca Copper and Lion One
Can any of the company-specific risk be diversified away by investing in both Marimaca Copper 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 Marimaca Copper and Lion One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marimaca Copper Corp and Lion One Metals, you can compare the effects of market volatilities on Marimaca Copper 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 Marimaca Copper with a short position of Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marimaca Copper and Lion One.
Diversification Opportunities for Marimaca Copper and Lion One
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Marimaca and Lion is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Marimaca Copper Corp 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 Marimaca Copper 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 Marimaca Copper Corp 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 Marimaca Copper i.e., Marimaca Copper and Lion One go up and down completely randomly.
Pair Corralation between Marimaca Copper and Lion One
Assuming the 90 days trading horizon Marimaca Copper Corp is expected to generate 0.68 times more return on investment than Lion One. However, Marimaca Copper Corp is 1.47 times less risky than Lion One. It trades about 0.03 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.04 per unit of risk. If you would invest 398.00 in Marimaca Copper Corp on September 2, 2024 and sell it today you would earn a total of 80.00 from holding Marimaca Copper Corp or generate 20.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marimaca Copper Corp vs. Lion One Metals
Performance |
| Timeline |
| Marimaca Copper Corp |
| Lion One Metals |
Marimaca Copper and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marimaca Copper and Lion One
The main advantage of trading using opposite Marimaca Copper and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marimaca Copper 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.| Marimaca Copper vs. Ero Copper Corp | Marimaca Copper vs. Dore Copper Mining | Marimaca Copper vs. QC Copper and | Marimaca Copper vs. Arizona Sonoran Copper |
| Lion One vs. First Majestic Silver | Lion One vs. Ivanhoe Energy | Lion One vs. Orezone Gold Corp | Lion One vs. Faraday Copper 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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