Correlation Between Lion One and Postal Savings

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Can any of the company-specific risk be diversified away by investing in both Lion One and Postal Savings 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 Postal Savings 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 Postal Savings Bank, you can compare the effects of market volatilities on Lion One and Postal Savings 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 Postal Savings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Postal Savings.

Diversification Opportunities for Lion One and Postal Savings

LionPostalDiversified AwayLionPostalDiversified Away100%
0.13
  Correlation Coefficient

Average diversification

The 3 months correlation between Lion and Postal is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Postal Savings Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Postal Savings Bank 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 Postal Savings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Postal Savings Bank has no effect on the direction of Lion One i.e., Lion One and Postal Savings go up and down completely randomly.

Pair Corralation between Lion One and Postal Savings

Assuming the 90 days horizon Lion One Metals is expected to under-perform the Postal Savings. But the stock apears to be less risky and, when comparing its historical volatility, Lion One Metals is 1.58 times less risky than Postal Savings. The stock trades about -0.04 of its potential returns per unit of risk. The Postal Savings Bank is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  8.05  in Postal Savings Bank on September 28, 2024 and sell it today you would earn a total of  47.95  from holding Postal Savings Bank or generate 595.65% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Lion One Metals  vs.  Postal Savings Bank

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -20-1001020
JavaScript chart by amCharts 3.21.15LY1 3YB
       Timeline  
Lion One Metals 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 basic 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.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec0.160.180.20.220.240.26
Postal Savings Bank 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Postal Savings Bank are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Postal Savings may actually be approaching a critical reversion point that can send shares even higher in January 2025.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec0.520.530.540.550.560.570.580.590.6

Lion One and Postal Savings Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-8.46-6.34-4.21-2.090.03422.024.076.128.18 0.010.020.030.040.050.060.07
JavaScript chart by amCharts 3.21.15LY1 3YB
       Returns  

Pair Trading with Lion One and Postal Savings

The main advantage of trading using opposite Lion One and Postal Savings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, Postal Savings 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 Postal Savings will offset losses from the drop in Postal Savings' long position.
The idea behind Lion One Metals and Postal Savings Bank 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.

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