Correlation Between LION ONE and Mastercard

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

Diversification Opportunities for LION ONE and Mastercard

-0.33

Correlation Coefficient

LION ONE  Mastercard

Very good diversification

The 3 months correlation between LION and Mastercard is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding LION ONE METALS and Mastercard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mastercard 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 Mastercard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mastercard has no effect on the direction of LION ONE i.e., LION ONE and Mastercard go up and down completely randomly.

Pair Corralation between LION ONE and Mastercard

Assuming the 90 days trading horizon LION ONE METALS is expected to under-perform the Mastercard. In addition to that, LION ONE is 3.69 times more volatile than Mastercard. It trades about -0.06 of its total potential returns per unit of risk. Mastercard is currently generating about 0.09 per unit of volatility. If you would invest  35,283  in Mastercard on September 12, 2024 and sell it today you would earn a total of  15,047  from holding Mastercard or generate 42.65% return on investment over 90 days.

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

LION ONE METALS  vs.  Mastercard

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 latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Mastercard

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mastercard are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Mastercard reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LION ONE and Mastercard

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

The idea behind LION ONE METALS and Mastercard 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.