Correlation Between Exploits Discovery and Lion One

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

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

Diversification Opportunities for Exploits Discovery and Lion One

-0.04

Correlation Coefficient

Exploits Discovery  Lion One

Good diversification

The 3 months correlation between Exploits and Lion is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Exploits Discovery Corp 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 Exploits Discovery 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 Exploits Discovery Corp 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 Exploits Discovery i.e., Exploits Discovery and Lion One go up and down completely randomly.

Pair Corralation between Exploits Discovery and Lion One

Assuming the 90 days horizon Exploits Discovery Corp is expected to under-perform the Lion One. In addition to that, Exploits Discovery is 1.79 times more volatile than Lion One Metals. It trades about -0.03 of its total potential returns per unit of risk. Lion One Metals is currently generating about 0.06 per unit of volatility. If you would invest  24.00  in Lion One Metals on July 23, 2024 and sell it today you would earn a total of  2.00  from holding Lion One Metals or generate 8.33% return on investment over 90 days.

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

Exploits Discovery Corp  vs.  Lion One Metals

Exploits Discovery Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exploits Discovery Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Lion One Metals

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lion One Metals are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, Lion One may actually be approaching a critical reversion point that can send shares even higher in November 2024.

Pair Trading with Exploits Discovery and Lion One

The main advantage of trading using opposite Exploits Discovery and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exploits Discovery 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 Exploits Discovery Corp 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.