Correlation Between Lion One and Aurelius Minerals

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

Diversification Opportunities for Lion One and Aurelius Minerals

0.0

Correlation Coefficient

Lion One  Aurelius Minerals

Pay attention - limited upside

The 3 months correlation between Lion and Aurelius is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Aurelius Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurelius Minerals 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 Aurelius Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurelius Minerals has no effect on the direction of Lion One i.e., Lion One and Aurelius Minerals go up and down completely randomly.

Pair Corralation between Lion One and Aurelius Minerals

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	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Lion One Metals  vs.  Aurelius Minerals

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.

Aurelius Minerals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aurelius Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Aurelius Minerals is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Lion One and Aurelius Minerals

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

The idea behind Lion One Metals and Aurelius Minerals 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.