Correlation Between LION ONE and Chiba Bank

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

Diversification Opportunities for LION ONE and Chiba Bank

-0.84

Correlation Coefficient

LION ONE  Chiba Bank

Pay attention - limited upside

The 3 months correlation between LION and Chiba is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding LION ONE METALS and Chiba Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chiba Bank 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 Chiba Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chiba Bank has no effect on the direction of LION ONE i.e., LION ONE and Chiba Bank go up and down completely randomly.

Pair Corralation between LION ONE and Chiba Bank

Assuming the 90 days trading horizon LION ONE is expected to generate 5.02 times less return on investment than Chiba Bank. In addition to that, LION ONE is 2.11 times more volatile than Chiba Bank. It trades about 0.0 of its total potential returns per unit of risk. Chiba Bank is currently generating about 0.04 per unit of volatility. If you would invest  695.00  in Chiba Bank on September 24, 2024 and sell it today you would earn a total of  30.00  from holding Chiba Bank or generate 4.32% return on investment over 90 days.

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

LION ONE METALS  vs.  Chiba Bank

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. In spite of comparatively stable basic indicators, LION ONE is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Chiba Bank

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Chiba Bank are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Chiba Bank is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with LION ONE and Chiba Bank

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

The idea behind LION ONE METALS and Chiba Bank 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.