Correlation Between World Copper and Lion One
Can any of the company-specific risk be diversified away by investing in both World Copper 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 World Copper and Lion One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between World Copper and Lion One Metals, you can compare the effects of market volatilities on World Copper 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 World Copper with a short position of Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of World Copper and Lion One.
Diversification Opportunities for World Copper and Lion One
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between World and Lion is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding World Copper 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 World Copper 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 World Copper 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 World Copper i.e., World Copper and Lion One go up and down completely randomly.
Pair Corralation between World Copper and Lion One
Assuming the 90 days horizon World Copper is expected to under-perform the Lion One. In addition to that, World Copper is 1.36 times more volatile than Lion One Metals. It trades about -0.07 of its total potential returns per unit of risk. Lion One Metals is currently generating about 0.05 per unit of volatility. If you would invest 25.00 in Lion One Metals on December 4, 2024 and sell it today you would earn a total of 2.00 from holding Lion One Metals or generate 8.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
World Copper vs. Lion One Metals
Performance |
Timeline |
World Copper |
Lion One Metals |
World Copper and Lion One Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with World Copper and Lion One
The main advantage of trading using opposite World Copper and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if World Copper 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.World Copper vs. Bell Copper Corp | World Copper vs. Northwest Copper Corp | World Copper vs. Wealth Minerals |
Check out your portfolio center.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.
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