Correlation Between Allegiant Gold and Lion One

Can any of the company-specific risk be diversified away by investing in both Allegiant Gold 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 Allegiant Gold and Lion One into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Allegiant Gold and Lion One Metals, you can compare the effects of market volatilities on Allegiant Gold 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 Allegiant Gold with a short position of Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allegiant Gold and Lion One.

Diversification Opportunities for Allegiant Gold and Lion One

0.59

Correlation Coefficient

Allegiant Gold  Lion One

Very weak diversification

The 3 months correlation between Allegiant and Lion is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Allegiant Gold 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 Allegiant Gold 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 Allegiant Gold 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 Allegiant Gold i.e., Allegiant Gold and Lion One go up and down completely randomly.

Pair Corralation between Allegiant Gold and Lion One

Assuming the 90 days horizon Allegiant Gold is expected to under-perform the Lion One. In addition to that, Allegiant Gold is 2.21 times more volatile than Lion One Metals. It trades about -0.19 of its total potential returns per unit of risk. Lion One Metals is currently generating about -0.3 per unit of volatility. If you would invest  25.00  in Lion One Metals on August 30, 2024 and sell it today you would lose (5.00) from holding Lion One Metals or give up 20.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.65%
Values	Daily Returns

Allegiant Gold  vs.  Lion One Metals

Allegiant Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Allegiant Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Lion One Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lion One Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's essential indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Allegiant Gold and Lion One

The main advantage of trading using opposite Allegiant Gold and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allegiant Gold 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.

The idea behind Allegiant Gold and Lion One Metals pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.