Correlation Between Lion One and Thesis Gold

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

Diversification Opportunities for Lion One and Thesis Gold

0.01

Correlation Coefficient

Lion One  Thesis Gold

Significant diversification

The 3 months correlation between Lion and Thesis is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Thesis Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thesis Gold 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 Thesis Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thesis Gold has no effect on the direction of Lion One i.e., Lion One and Thesis Gold go up and down completely randomly.

Pair Corralation between Lion One and Thesis Gold

Assuming the 90 days horizon Lion One is expected to generate 1.13 times less return on investment than Thesis Gold. In addition to that, Lion One is 1.46 times more volatile than Thesis Gold. It trades about 0.11 of its total potential returns per unit of risk. Thesis Gold is currently generating about 0.19 per unit of volatility. If you would invest  56.00  in Thesis Gold on December 28, 2024 and sell it today you would earn a total of  33.00  from holding Thesis Gold or generate 58.93% return on investment over 90 days.

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

Lion One Metals  vs.  Thesis Gold

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 9 (%) 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.

Thesis Gold

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Thesis Gold are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Thesis Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lion One and Thesis Gold

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

The idea behind Lion One Metals and Thesis Gold 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.