Correlation Between Lion One and Identillect Technologies

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

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

Diversification Opportunities for Lion One and Identillect Technologies

0.39

Correlation Coefficient

Lion One  Identillect Technologies

Weak diversification

The 3 months correlation between Lion and Identillect is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Identillect Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identillect Technologies and Lion One 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 Lion One Metals are associated (or correlated) with Identillect Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Identillect Technologies has no effect on the direction of Lion One i.e., Lion One and Identillect Technologies go up and down completely randomly.

Pair Corralation between Lion One and Identillect Technologies

Assuming the 90 days horizon Lion One is expected to generate 8.84 times less return on investment than Identillect Technologies. But when comparing it to its historical volatility, Lion One Metals is 5.51 times less risky than Identillect Technologies. It trades about 0.09 of its potential returns per unit of risk. Identillect Technologies Corp is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  0.50  in Identillect Technologies Corp on December 24, 2024 and sell it today you would earn a total of  0.00  from holding Identillect Technologies Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Lion One Metals  vs.  Identillect Technologies Corp

Lion One Metals

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lion One Metals are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Lion One showed solid returns over the last few months and may actually be approaching a breakup point.

Identillect Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Identillect Technologies Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Identillect Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lion One and Identillect Technologies

The main advantage of trading using opposite Lion One and Identillect Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, Identillect Technologies 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 Identillect Technologies will offset losses from the drop in Identillect Technologies' long position.

The idea behind Lion One Metals and Identillect Technologies Corp 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.