Correlation Between EMBARK EDUCATION and LION ONE

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

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

Diversification Opportunities for EMBARK EDUCATION and LION ONE

-0.75

Correlation Coefficient

EMBARK EDUCATION  LION ONE

Pay attention - limited upside

The 3 months correlation between EMBARK and LION is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding EMBARK EDUCATION LTD 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 EMBARK EDUCATION 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 EMBARK EDUCATION LTD 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 EMBARK EDUCATION i.e., EMBARK EDUCATION and LION ONE go up and down completely randomly.

Pair Corralation between EMBARK EDUCATION and LION ONE

Assuming the 90 days horizon EMBARK EDUCATION LTD is expected to generate 0.09 times more return on investment than LION ONE. However, EMBARK EDUCATION LTD is 11.66 times less risky than LION ONE. It trades about 0.13 of its potential returns per unit of risk. LION ONE METALS is currently generating about -0.06 per unit of risk. If you would invest  30.00  in EMBARK EDUCATION LTD on September 27, 2024 and sell it today you would earn a total of  1.00  from holding EMBARK EDUCATION LTD or generate 3.33% return on investment over 90 days.

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

EMBARK EDUCATION LTD  vs.  LION ONE METALS

EMBARK EDUCATION LTD

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in EMBARK EDUCATION LTD are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, EMBARK EDUCATION is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with EMBARK EDUCATION and LION ONE

The main advantage of trading using opposite EMBARK EDUCATION and LION ONE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMBARK EDUCATION 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 EMBARK EDUCATION LTD 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.