Correlation Between Trend Micro and Lion One
Can any of the company-specific risk be diversified away by investing in both Trend Micro 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 Trend Micro and Lion One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trend Micro and Lion One Metals, you can compare the effects of market volatilities on Trend Micro 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 Trend Micro with a short position of Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trend Micro and Lion One.
Diversification Opportunities for Trend Micro and Lion One
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Trend and Lion is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Trend Micro 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 Trend Micro 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 Trend Micro 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 Trend Micro i.e., Trend Micro and Lion One go up and down completely randomly.
Pair Corralation between Trend Micro and Lion One
Assuming the 90 days horizon Trend Micro is expected to generate 0.65 times more return on investment than Lion One. However, Trend Micro is 1.53 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 -0.05 per unit of risk. If you would invest 4,540 in Trend Micro on October 9, 2024 and sell it today you would earn a total of 1,220 from holding Trend Micro or generate 26.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trend Micro vs. Lion One Metals
Performance |
| Timeline |
| Trend Micro |
| Lion One Metals |
Trend Micro and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trend Micro and Lion One
The main advantage of trading using opposite Trend Micro and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trend Micro 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.| Trend Micro vs. WK Kellogg Co | Trend Micro vs. Sun Country Airlines | Trend Micro vs. International Consolidated Airlines | Trend Micro vs. Singapore Airlines |
| Lion One vs. Irving Resources | Lion One vs. Headwater Gold | Lion One vs. Novo Resources Corp | Lion One vs. Snowline Gold 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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