Correlation Between Lion One and 26442CAH7

Can any of the company-specific risk be diversified away by investing in both Lion One and 26442CAH7 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 26442CAH7 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 DUKE ENERGY CAROLINAS, you can compare the effects of market volatilities on Lion One and 26442CAH7 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 26442CAH7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and 26442CAH7.

Diversification Opportunities for Lion One and 26442CAH7

0.31

Correlation Coefficient

Lion One  26442CAH7

Weak diversification

The 3 months correlation between Lion and 26442CAH7 is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and DUKE ENERGY CAROLINAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DUKE ENERGY CAROLINAS 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 26442CAH7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DUKE ENERGY CAROLINAS has no effect on the direction of Lion One i.e., Lion One and 26442CAH7 go up and down completely randomly.

Pair Corralation between Lion One and 26442CAH7

Assuming the 90 days horizon Lion One Metals is expected to under-perform the 26442CAH7. In addition to that, Lion One is 3.61 times more volatile than DUKE ENERGY CAROLINAS. It trades about -0.05 of its total potential returns per unit of risk. DUKE ENERGY CAROLINAS is currently generating about 0.0 per unit of volatility. If you would invest  10,044  in DUKE ENERGY CAROLINAS on October 25, 2024 and sell it today you would lose (19.00) from holding DUKE ENERGY CAROLINAS or give up 0.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.31%
Values	Daily Returns

Lion One Metals  vs.  DUKE ENERGY CAROLINAS

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

DUKE ENERGY CAROLINAS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DUKE ENERGY CAROLINAS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 26442CAH7 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lion One and 26442CAH7

The main advantage of trading using opposite Lion One and 26442CAH7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, 26442CAH7 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 26442CAH7 will offset losses from the drop in 26442CAH7's long position.

The idea behind Lion One Metals and DUKE ENERGY CAROLINAS 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.