Correlation Between 194162AN3 and Lion One

Can any of the company-specific risk be diversified away by investing in both 194162AN3 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 194162AN3 and Lion One into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CL 31 15 AUG 27 and Lion One Metals, you can compare the effects of market volatilities on 194162AN3 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 194162AN3 with a short position of Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of 194162AN3 and Lion One.

Diversification Opportunities for 194162AN3 and Lion One

0.56

Correlation Coefficient

194162AN3  Lion One

Very weak diversification

The 3 months correlation between 194162AN3 and Lion is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding CL 31 15 AUG 27 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 194162AN3 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 CL 31 15 AUG 27 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 194162AN3 i.e., 194162AN3 and Lion One go up and down completely randomly.

Pair Corralation between 194162AN3 and Lion One

Assuming the 90 days trading horizon CL 31 15 AUG 27 is expected to generate 0.24 times more return on investment than Lion One. However, CL 31 15 AUG 27 is 4.18 times less risky than Lion One. It trades about -0.09 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.13 per unit of risk. If you would invest  9,877  in CL 31 15 AUG 27 on September 25, 2024 and sell it today you would lose (369.00) from holding CL 31 15 AUG 27 or give up 3.74% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	87.3%
Values	Daily Returns

CL 31 15 AUG 27  vs.  Lion One Metals

194162AN3

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CL 31 15 AUG 27 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 194162AN3 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the 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 weak 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 194162AN3 and Lion One

The main advantage of trading using opposite 194162AN3 and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 194162AN3 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 CL 31 15 AUG 27 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.

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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.