Correlation Between 50249AAJ2 and Lion One

Can any of the company-specific risk be diversified away by investing in both 50249AAJ2 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 50249AAJ2 and Lion One into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between LYB INTERNATIONAL FINANCE and Lion One Metals, you can compare the effects of market volatilities on 50249AAJ2 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 50249AAJ2 with a short position of Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of 50249AAJ2 and Lion One.

Diversification Opportunities for 50249AAJ2 and Lion One

0.28

Correlation Coefficient

50249AAJ2  Lion One

Modest diversification

The 3 months correlation between 50249AAJ2 and Lion is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding LYB INTERNATIONAL FINANCE 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 50249AAJ2 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 LYB INTERNATIONAL FINANCE 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 50249AAJ2 i.e., 50249AAJ2 and Lion One go up and down completely randomly.

Pair Corralation between 50249AAJ2 and Lion One

Assuming the 90 days trading horizon LYB INTERNATIONAL FINANCE is expected to generate 13.62 times more return on investment than Lion One. However, 50249AAJ2 is 13.62 times more volatile than Lion One Metals. It trades about 0.05 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.07 per unit of risk. If you would invest  6,908  in LYB INTERNATIONAL FINANCE on September 23, 2024 and sell it today you would lose (166.00) from holding LYB INTERNATIONAL FINANCE or give up 2.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.48%
Values	Daily Returns

LYB INTERNATIONAL FINANCE  vs.  Lion One Metals

LYB INTERNATIONAL FINANCE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LYB INTERNATIONAL FINANCE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for LYB INTERNATIONAL FINANCE 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 fragile performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with 50249AAJ2 and Lion One

The main advantage of trading using opposite 50249AAJ2 and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 50249AAJ2 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 LYB INTERNATIONAL FINANCE 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.