Correlation Between Western Copper and Lion One
Can any of the company-specific risk be diversified away by investing in both Western 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 Western 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 Western Copper and and Lion One Metals, you can compare the effects of market volatilities on Western 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 Western Copper with a short position of Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and Lion One.
Diversification Opportunities for Western Copper and Lion One
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and Lion is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and 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 Western 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 Western Copper and 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 Western Copper i.e., Western Copper and Lion One go up and down completely randomly.
Pair Corralation between Western Copper and Lion One
Considering the 90-day investment horizon Western Copper is expected to generate 33.59 times less return on investment than Lion One. But when comparing it to its historical volatility, Western Copper and is 1.73 times less risky than Lion One. It trades about 0.01 of its potential returns per unit of risk. Lion One Metals is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 18.00 in Lion One Metals on October 20, 2024 and sell it today you would earn a total of 4.00 from holding Lion One Metals or generate 22.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Western Copper and vs. Lion One Metals
Performance |
| Timeline |
| Western Copper |
| Lion One Metals |
Western Copper and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Copper and Lion One
The main advantage of trading using opposite Western Copper and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western 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.| Western Copper vs. Fury Gold Mines | Western Copper vs. EMX Royalty Corp | Western Copper vs. Nevada King Gold | Western Copper vs. Aftermath Silver |
| 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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