Correlation Between Lion One and Sixty North

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

Diversification Opportunities for Lion One and Sixty North

0.32

Correlation Coefficient

Lion One  Sixty North

Weak diversification

The 3 months correlation between Lion and Sixty is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Sixty North Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sixty North 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 Sixty North. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sixty North Gold has no effect on the direction of Lion One i.e., Lion One and Sixty North go up and down completely randomly.

Pair Corralation between Lion One and Sixty North

Assuming the 90 days horizon Lion One Metals is expected to generate 0.47 times more return on investment than Sixty North. However, Lion One Metals is 2.12 times less risky than Sixty North. It trades about -0.18 of its potential returns per unit of risk. Sixty North Gold is currently generating about -0.13 per unit of risk. If you would invest  21.00  in Lion One Metals on September 22, 2024 and sell it today you would lose (3.00) from holding Lion One Metals or give up 14.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Lion One Metals  vs.  Sixty North Gold

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 weak 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.

Sixty North Gold

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sixty North Gold are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Sixty North reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lion One and Sixty North

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

The idea behind Lion One Metals and Sixty North 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.

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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.