Correlation Between Endurance Gold and Lion One

Can any of the company-specific risk be diversified away by investing in both Endurance 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 Endurance 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 Endurance Gold and Lion One Metals, you can compare the effects of market volatilities on Endurance 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 Endurance Gold with a short position of Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endurance Gold and Lion One.

Diversification Opportunities for Endurance Gold and Lion One

-0.17

Correlation Coefficient

Endurance Gold  Lion One

Good diversification

The 3 months correlation between Endurance and Lion is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Endurance 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 Endurance 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 Endurance 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 Endurance Gold i.e., Endurance Gold and Lion One go up and down completely randomly.

Pair Corralation between Endurance Gold and Lion One

Assuming the 90 days horizon Endurance Gold is expected to generate 9.3 times less return on investment than Lion One. But when comparing it to its historical volatility, Endurance Gold is 1.74 times less risky than Lion One. It trades about 0.02 of its potential returns per unit of risk. Lion One Metals is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  17.00  in Lion One Metals on December 29, 2024 and sell it today you would earn a total of  5.00  from holding Lion One Metals or generate 29.41% return on investment over 90 days.

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

Endurance Gold  vs.  Lion One Metals

Endurance Gold

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Endurance Gold are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Endurance Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Lion One Metals

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lion One Metals are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak essential indicators, Lion One reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Endurance Gold and Lion One

The main advantage of trading using opposite Endurance Gold and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Endurance 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 Endurance 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.