Correlation Between LION ONE and Forgame Holdings

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

Diversification Opportunities for LION ONE and Forgame Holdings

-0.27

Correlation Coefficient

LION ONE  Forgame Holdings

Very good diversification

The 3 months correlation between LION and Forgame is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding LION ONE METALS and Forgame Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forgame Holdings 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 Forgame Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forgame Holdings has no effect on the direction of LION ONE i.e., LION ONE and Forgame Holdings go up and down completely randomly.

Pair Corralation between LION ONE and Forgame Holdings

Assuming the 90 days trading horizon LION ONE METALS is expected to under-perform the Forgame Holdings. In addition to that, LION ONE is 1.2 times more volatile than Forgame Holdings. It trades about 0.0 of its total potential returns per unit of risk. Forgame Holdings is currently generating about 0.12 per unit of volatility. If you would invest  7.40  in Forgame Holdings on April 25, 2025 and sell it today you would earn a total of  1.85  from holding Forgame Holdings or generate 25.0% return on investment over 90 days.

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

LION ONE METALS  vs.  Forgame Holdings

LION ONE METALS

Risk-Adjusted Performance

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 comparatively stable basic indicators, LION ONE is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Forgame Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Forgame Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Forgame Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LION ONE and Forgame Holdings

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

The idea behind LION ONE METALS and Forgame Holdings 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.