Correlation Between TYSON FOODS and LION ONE

Can any of the company-specific risk be diversified away by investing in both TYSON FOODS 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 TYSON FOODS and LION ONE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TYSON FOODS A and LION ONE METALS, you can compare the effects of market volatilities on TYSON FOODS 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 TYSON FOODS with a short position of LION ONE. Check out your portfolio center. Please also check ongoing floating volatility patterns of TYSON FOODS and LION ONE.

Diversification Opportunities for TYSON FOODS and LION ONE

-0.6

Correlation Coefficient

TYSON FOODS  LION ONE

Excellent diversification

The 3 months correlation between TYSON and LION is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding TYSON FOODS A 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 TYSON FOODS 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 TYSON FOODS A 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 TYSON FOODS i.e., TYSON FOODS and LION ONE go up and down completely randomly.

Pair Corralation between TYSON FOODS and LION ONE

Assuming the 90 days trading horizon TYSON FOODS A is expected to generate 0.44 times more return on investment than LION ONE. However, TYSON FOODS A is 2.27 times less risky than LION ONE. It trades about 0.33 of its potential returns per unit of risk. LION ONE METALS is currently generating about -0.24 per unit of risk. If you would invest  5,288  in TYSON FOODS A on September 5, 2024 and sell it today you would earn a total of  811.00  from holding TYSON FOODS A or generate 15.34% return on investment over 90 days.

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

TYSON FOODS A   vs.  LION ONE METALS

TYSON FOODS A

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in TYSON FOODS A are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, TYSON FOODS is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

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 fragile 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.

Pair Trading with TYSON FOODS and LION ONE

The main advantage of trading using opposite TYSON FOODS and LION ONE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TYSON FOODS 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 TYSON FOODS A 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.