Correlation Between Lion One and FTD Companies

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

Diversification Opportunities for Lion One and FTD Companies

0.0

Correlation Coefficient

Lion One  FTD Companies

Pay attention - limited upside

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

Pair Corralation between Lion One and FTD Companies

If you would invest (100.00) in FTD Companies on September 13, 2024 and sell it today you would earn a total of  100.00  from holding FTD Companies or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Lion One Metals  vs.  FTD Companies

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. Despite abnormal performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

FTD Companies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FTD Companies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, FTD Companies is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Lion One and FTD Companies

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

The idea behind Lion One Metals and FTD Companies 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.