Correlation Between Lion One and AIR PRODCHEMICALS
Can any of the company-specific risk be diversified away by investing in both Lion One and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS 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 AIR PRODCHEMICALS, you can compare the effects of market volatilities on Lion One and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and AIR PRODCHEMICALS.
Diversification Opportunities for Lion One and AIR PRODCHEMICALS
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lion and AIR is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and AIR PRODCHEMICALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIR PRODCHEMICALS 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 AIR PRODCHEMICALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIR PRODCHEMICALS has no effect on the direction of Lion One i.e., Lion One and AIR PRODCHEMICALS go up and down completely randomly.
Pair Corralation between Lion One and AIR PRODCHEMICALS
Assuming the 90 days horizon Lion One Metals is expected to generate 4.78 times more return on investment than AIR PRODCHEMICALS. However, Lion One is 4.78 times more volatile than AIR PRODCHEMICALS. It trades about 0.09 of its potential returns per unit of risk. AIR PRODCHEMICALS is currently generating about -0.03 per unit of risk. If you would invest 15.00 in Lion One Metals on December 27, 2024 and sell it today you would earn a total of 4.00 from holding Lion One Metals or generate 26.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Lion One Metals vs. AIR PRODCHEMICALS
Performance |
Timeline |
Lion One Metals |
AIR PRODCHEMICALS |
Lion One and AIR PRODCHEMICALS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lion One and AIR PRODCHEMICALS
The main advantage of trading using opposite Lion One and AIR PRODCHEMICALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, AIR PRODCHEMICALS 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 AIR PRODCHEMICALS will offset losses from the drop in AIR PRODCHEMICALS's long position.Lion One vs. ZIJIN MINH UNSPADR20 | Lion One vs. Newmont | Lion One vs. Barrick Gold | Lion One vs. Franco Nevada |
AIR PRODCHEMICALS vs. Southern Cross Media | AIR PRODCHEMICALS vs. Yuexiu Transport Infrastructure | AIR PRODCHEMICALS vs. G5 Entertainment AB | AIR PRODCHEMICALS vs. PROSIEBENSAT1 MEDIADR4 |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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