Correlation Between ChampionX and Lion One

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

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

Diversification Opportunities for ChampionX and Lion One

0.0

Correlation Coefficient

ChampionX  Lion One

Pay attention - limited upside

The 3 months correlation between ChampionX and Lion is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ChampionX 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 ChampionX 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 ChampionX 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 ChampionX i.e., ChampionX and Lion One go up and down completely randomly.

Pair Corralation between ChampionX and Lion One

Considering the 90-day investment horizon ChampionX is expected to generate 0.74 times more return on investment than Lion One. However, ChampionX is 1.36 times less risky than Lion One. It trades about 0.17 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.26 per unit of risk. If you would invest  2,843  in ChampionX on September 4, 2024 and sell it today you would earn a total of  234.00  from holding ChampionX or generate 8.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

ChampionX  vs.  Lion One Metals

ChampionX

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ChampionX are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical indicators, ChampionX is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

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 nearly stable essential indicators, Lion One is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ChampionX and Lion One

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

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.