Correlation Between Lion One and Dayforce

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

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

Diversification Opportunities for Lion One and Dayforce

-0.65

Correlation Coefficient

Lion One  Dayforce

Excellent diversification

The 3 months correlation between Lion and Dayforce is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Dayforce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dayforce and Lion One 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 Lion One Metals are associated (or correlated) with Dayforce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dayforce has no effect on the direction of Lion One i.e., Lion One and Dayforce go up and down completely randomly.

Pair Corralation between Lion One and Dayforce

Assuming the 90 days horizon Lion One Metals is expected to under-perform the Dayforce. In addition to that, Lion One is 1.74 times more volatile than Dayforce. It trades about -0.06 of its total potential returns per unit of risk. Dayforce is currently generating about 0.25 per unit of volatility. If you would invest  8,015  in Dayforce on September 17, 2024 and sell it today you would earn a total of  2,975  from holding Dayforce or generate 37.12% return on investment over 90 days.

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

Lion One Metals  vs.  Dayforce

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 unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Dayforce

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dayforce are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Dayforce displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lion One and Dayforce

The main advantage of trading using opposite Lion One and Dayforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, Dayforce 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 Dayforce will offset losses from the drop in Dayforce's long position.

The idea behind Lion One Metals and Dayforce 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.