Correlation Between ANZNZ and Lion One

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

By analyzing existing cross correlation between ANZNZ 5548 11 AUG 32 and Lion One Metals, you can compare the effects of market volatilities on ANZNZ 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 ANZNZ with a short position of Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANZNZ and Lion One.

Diversification Opportunities for ANZNZ and Lion One

-0.22

Correlation Coefficient

ANZNZ  Lion One

Very good diversification

The 3 months correlation between ANZNZ and Lion is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding ANZNZ 5548 11 AUG 32 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 ANZNZ 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 ANZNZ 5548 11 AUG 32 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 ANZNZ i.e., ANZNZ and Lion One go up and down completely randomly.

Pair Corralation between ANZNZ and Lion One

Assuming the 90 days trading horizon ANZNZ 5548 11 AUG 32 is expected to generate 0.19 times more return on investment than Lion One. However, ANZNZ 5548 11 AUG 32 is 5.27 times less risky than Lion One. It trades about 0.03 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.08 per unit of risk. If you would invest  9,975  in ANZNZ 5548 11 AUG 32 on October 9, 2024 and sell it today you would earn a total of  64.00  from holding ANZNZ 5548 11 AUG 32 or generate 0.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	17.07%
Values	Daily Returns

ANZNZ 5548 11 AUG 32  vs.  Lion One Metals

ANZNZ 5548 11

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANZNZ 5548 11 AUG 32 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ANZNZ is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

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. Despite weak performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with ANZNZ and Lion One

The main advantage of trading using opposite ANZNZ and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANZNZ 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 ANZNZ 5548 11 AUG 32 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.