Correlation Between LION ONE and MOVIE GAMES

Can any of the company-specific risk be diversified away by investing in both LION ONE and MOVIE GAMES 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 MOVIE GAMES 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 MOVIE GAMES SA, you can compare the effects of market volatilities on LION ONE and MOVIE GAMES 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 MOVIE GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of LION ONE and MOVIE GAMES.

Diversification Opportunities for LION ONE and MOVIE GAMES

0.64

Correlation Coefficient

LION ONE  MOVIE GAMES

Poor diversification

The 3 months correlation between LION and MOVIE is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding LION ONE METALS and MOVIE GAMES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOVIE GAMES SA 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 MOVIE GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOVIE GAMES SA has no effect on the direction of LION ONE i.e., LION ONE and MOVIE GAMES go up and down completely randomly.

Pair Corralation between LION ONE and MOVIE GAMES

Assuming the 90 days trading horizon LION ONE METALS is expected to under-perform the MOVIE GAMES. In addition to that, LION ONE is 1.17 times more volatile than MOVIE GAMES SA. It trades about -0.03 of its total potential returns per unit of risk. MOVIE GAMES SA is currently generating about 0.02 per unit of volatility. If you would invest  388.00  in MOVIE GAMES SA on December 2, 2024 and sell it today you would lose (3.00) from holding MOVIE GAMES SA or give up 0.77% of portfolio value over 90 days.

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

LION ONE METALS  vs.  MOVIE GAMES SA

LION ONE METALS

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LION ONE METALS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, LION ONE may actually be approaching a critical reversion point that can send shares even higher in April 2025.

MOVIE GAMES SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MOVIE GAMES SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, MOVIE GAMES reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LION ONE and MOVIE GAMES

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

The idea behind LION ONE METALS and MOVIE GAMES SA 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..