Correlation Between LION ONE and TOTAL ENERGY
Can any of the company-specific risk be diversified away by investing in both LION ONE and TOTAL ENERGY 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 TOTAL ENERGY 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 TOTAL ENERGY SERVS, you can compare the effects of market volatilities on LION ONE and TOTAL ENERGY 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 TOTAL ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of LION ONE and TOTAL ENERGY.
Diversification Opportunities for LION ONE and TOTAL ENERGY
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between LION and TOTAL is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding LION ONE METALS and TOTAL ENERGY SERVS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOTAL ENERGY SERVS 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 TOTAL ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOTAL ENERGY SERVS has no effect on the direction of LION ONE i.e., LION ONE and TOTAL ENERGY go up and down completely randomly.
Pair Corralation between LION ONE and TOTAL ENERGY
Assuming the 90 days trading horizon LION ONE METALS is expected to generate 3.17 times more return on investment than TOTAL ENERGY. However, LION ONE is 3.17 times more volatile than TOTAL ENERGY SERVS. It trades about 0.02 of its potential returns per unit of risk. TOTAL ENERGY SERVS is currently generating about -0.07 per unit of risk. If you would invest 18.00 in LION ONE METALS on December 2, 2024 and sell it today you would lose (1.00) from holding LION ONE METALS or give up 5.56% 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. TOTAL ENERGY SERVS
Performance |
Timeline |
LION ONE METALS |
TOTAL ENERGY SERVS |
LION ONE and TOTAL ENERGY Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with LION ONE and TOTAL ENERGY
The main advantage of trading using opposite LION ONE and TOTAL ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LION ONE position performs unexpectedly, TOTAL ENERGY 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 TOTAL ENERGY will offset losses from the drop in TOTAL ENERGY's long position.LION ONE vs. Sabre Insurance Group | LION ONE vs. Luckin Coffee | LION ONE vs. SBI Insurance Group | LION ONE vs. Darden Restaurants |
TOTAL ENERGY vs. AWILCO DRILLING PLC | TOTAL ENERGY vs. UET United Electronic | TOTAL ENERGY vs. Samsung Electronics Co | TOTAL ENERGY vs. Pembina Pipeline Corp |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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