Correlation Between Westshore Terminals and Lion One
Can any of the company-specific risk be diversified away by investing in both Westshore Terminals 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 Westshore Terminals and Lion One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westshore Terminals Investment and Lion One Metals, you can compare the effects of market volatilities on Westshore Terminals 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 Westshore Terminals with a short position of Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westshore Terminals and Lion One.
Diversification Opportunities for Westshore Terminals and Lion One
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Westshore and Lion is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Westshore Terminals Investment 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 Westshore Terminals 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 Westshore Terminals Investment 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 Westshore Terminals i.e., Westshore Terminals and Lion One go up and down completely randomly.
Pair Corralation between Westshore Terminals and Lion One
Assuming the 90 days trading horizon Westshore Terminals Investment is expected to generate 0.23 times more return on investment than Lion One. However, Westshore Terminals Investment is 4.27 times less risky than Lion One. It trades about 0.28 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.18 per unit of risk. If you would invest 2,301 in Westshore Terminals Investment on September 1, 2024 and sell it today you would earn a total of 125.00 from holding Westshore Terminals Investment or generate 5.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westshore Terminals Investment vs. Lion One Metals
Performance |
| Timeline |
| Westshore Terminals |
| Lion One Metals |
Westshore Terminals and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westshore Terminals and Lion One
The main advantage of trading using opposite Westshore Terminals and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westshore Terminals 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.| Westshore Terminals vs. Mullen Group | Westshore Terminals vs. Ritchie Bros Auctioneers | Westshore Terminals vs. Winpak | Westshore Terminals vs. North West |
| 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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