Correlation Between Lion One and Where Food

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

Diversification Opportunities for Lion One and Where Food

-0.79

Correlation Coefficient

Lion One  Where Food

Pay attention - limited upside

The 3 months correlation between Lion and Where is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Where Food Comes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Where Food Comes 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 Where Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Where Food Comes has no effect on the direction of Lion One i.e., Lion One and Where Food go up and down completely randomly.

Pair Corralation between Lion One and Where Food

Assuming the 90 days horizon Lion One Metals is expected to under-perform the Where Food. In addition to that, Lion One is 1.59 times more volatile than Where Food Comes. It trades about -0.18 of its total potential returns per unit of risk. Where Food Comes is currently generating about 0.23 per unit of volatility. If you would invest  1,127  in Where Food Comes on September 21, 2024 and sell it today you would earn a total of  128.00  from holding Where Food Comes or generate 11.36% return on investment over 90 days.

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

Lion One Metals  vs.  Where Food Comes

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.

Where Food Comes

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Where Food Comes are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal fundamental indicators, Where Food reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lion One and Where Food

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

The idea behind Lion One Metals and Where Food Comes 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.