Correlation Between Thesis Gold and Lion One

Can any of the company-specific risk be diversified away by investing in both Thesis Gold and Lion One 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 Thesis Gold and Lion One into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Thesis Gold and Lion One Metals, you can compare the effects of market volatilities on Thesis Gold and Lion One 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 Thesis Gold with a short position of Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thesis Gold and Lion One.

Diversification Opportunities for Thesis Gold and Lion One

-0.11

Correlation Coefficient

Thesis Gold  Lion One

Good diversification

The 3 months correlation between Thesis and Lion is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Thesis Gold and Lion One Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion One Metals and Thesis Gold 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 Thesis Gold are associated (or correlated) with Lion One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion One Metals has no effect on the direction of Thesis Gold i.e., Thesis Gold and Lion One go up and down completely randomly.

Pair Corralation between Thesis Gold and Lion One

Assuming the 90 days horizon Thesis Gold is expected to generate 0.71 times more return on investment than Lion One. However, Thesis Gold is 1.4 times less risky than Lion One. It trades about 0.25 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.23 per unit of risk. If you would invest  65.00  in Thesis Gold on December 1, 2024 and sell it today you would earn a total of  17.00  from holding Thesis Gold or generate 26.15% return on investment over 90 days.

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

Thesis Gold  vs.  Lion One Metals

Thesis Gold

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Thesis Gold are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Thesis Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Lion One Metals

Risk-Adjusted Performance

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 fairly stable basic indicators, Lion One is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Thesis Gold and Lion One

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

The idea behind Thesis Gold and Lion One Metals 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.