Correlation Between Marine Products and Lion One
Can any of the company-specific risk be diversified away by investing in both Marine Products 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 Marine Products and Lion One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marine Products and Lion One Metals, you can compare the effects of market volatilities on Marine Products 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 Marine Products with a short position of Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marine Products and Lion One.
Diversification Opportunities for Marine Products and Lion One
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Marine and Lion is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Marine Products 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 Marine Products 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 Marine Products 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 Marine Products i.e., Marine Products and Lion One go up and down completely randomly.
Pair Corralation between Marine Products and Lion One
Considering the 90-day investment horizon Marine Products is expected to generate 0.6 times more return on investment than Lion One. However, Marine Products is 1.67 times less risky than Lion One. It trades about 0.25 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.35 per unit of risk. If you would invest 937.00 in Marine Products on August 28, 2024 and sell it today you would earn a total of 84.00 from holding Marine Products or generate 8.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marine Products vs. Lion One Metals
Performance |
| Timeline |
| Marine Products |
| Lion One Metals |
Marine Products and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marine Products and Lion One
The main advantage of trading using opposite Marine Products and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marine Products 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.| Marine Products vs. Thor Industries | Marine Products vs. BRP Inc | Marine Products vs. Brunswick | Marine Products vs. EZGO Technologies |
| Lion One vs. Ascendant Resources | Lion One vs. Cantex Mine Development | Lion One vs. Amarc Resources | Lion One vs. Sterling Metals 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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