Correlation Between Lion One and Infrastructure Dividend

Can any of the company-specific risk be diversified away by investing in both Lion One and Infrastructure Dividend 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 Infrastructure Dividend 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 Infrastructure Dividend Split, you can compare the effects of market volatilities on Lion One and Infrastructure Dividend 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 Infrastructure Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Infrastructure Dividend.

Diversification Opportunities for Lion One and Infrastructure Dividend

0.15

Correlation Coefficient

Lion One  Infrastructure Dividend

Average diversification

The 3 months correlation between Lion and Infrastructure is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Infrastructure Dividend Split in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infrastructure Dividend 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 Infrastructure Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infrastructure Dividend has no effect on the direction of Lion One i.e., Lion One and Infrastructure Dividend go up and down completely randomly.

Pair Corralation between Lion One and Infrastructure Dividend

Assuming the 90 days horizon Lion One Metals is expected to under-perform the Infrastructure Dividend. In addition to that, Lion One is 7.58 times more volatile than Infrastructure Dividend Split. It trades about -0.05 of its total potential returns per unit of risk. Infrastructure Dividend Split is currently generating about -0.01 per unit of volatility. If you would invest  1,493  in Infrastructure Dividend Split on September 23, 2024 and sell it today you would lose (3.00) from holding Infrastructure Dividend Split or give up 0.2% of portfolio value over 90 days.

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

Lion One Metals  vs.  Infrastructure Dividend Split

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. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Infrastructure Dividend

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Infrastructure Dividend Split are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Infrastructure Dividend is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Lion One and Infrastructure Dividend

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

The idea behind Lion One Metals and Infrastructure Dividend Split 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.