Correlation Between Lion One and BLUELINX HLDGS
Can any of the company-specific risk be diversified away by investing in both Lion One and BLUELINX HLDGS 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 BLUELINX HLDGS 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 BLUELINX HLDGS DL 01, you can compare the effects of market volatilities on Lion One and BLUELINX HLDGS 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 BLUELINX HLDGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and BLUELINX HLDGS.
Diversification Opportunities for Lion One and BLUELINX HLDGS
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lion and BLUELINX is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and BLUELINX HLDGS DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BLUELINX HLDGS DL 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 BLUELINX HLDGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BLUELINX HLDGS DL has no effect on the direction of Lion One i.e., Lion One and BLUELINX HLDGS go up and down completely randomly.
Pair Corralation between Lion One and BLUELINX HLDGS
Assuming the 90 days horizon Lion One Metals is expected to generate 1.77 times more return on investment than BLUELINX HLDGS. However, Lion One is 1.77 times more volatile than BLUELINX HLDGS DL 01. It trades about -0.02 of its potential returns per unit of risk. BLUELINX HLDGS DL 01 is currently generating about -0.05 per unit of risk. If you would invest 32.00 in Lion One Metals on December 5, 2024 and sell it today you would lose (15.00) from holding Lion One Metals or give up 46.87% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Lion One Metals vs. BLUELINX HLDGS DL 01
Performance |
Timeline |
Lion One Metals |
BLUELINX HLDGS DL |
Lion One and BLUELINX HLDGS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lion One and BLUELINX HLDGS
The main advantage of trading using opposite Lion One and BLUELINX HLDGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, BLUELINX HLDGS 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 BLUELINX HLDGS will offset losses from the drop in BLUELINX HLDGS's long position.Lion One vs. CORNISH METALS INC | Lion One vs. East Africa Metals | Lion One vs. Office Properties Income | Lion One vs. Western Copper and |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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