Correlation Between Lundin Mining and Atalaya Mining

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

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

Diversification Opportunities for Lundin Mining and Atalaya Mining

0.34

Correlation Coefficient

Lundin Mining  Atalaya Mining

Weak diversification

The 3 months correlation between Lundin and Atalaya is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and Atalaya Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atalaya Mining and Lundin Mining 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 Lundin Mining Corp are associated (or correlated) with Atalaya Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atalaya Mining has no effect on the direction of Lundin Mining i.e., Lundin Mining and Atalaya Mining go up and down completely randomly.

Pair Corralation between Lundin Mining and Atalaya Mining

Assuming the 90 days trading horizon Lundin Mining Corp is expected to under-perform the Atalaya Mining. In addition to that, Lundin Mining is 1.36 times more volatile than Atalaya Mining. It trades about -0.09 of its total potential returns per unit of risk. Atalaya Mining is currently generating about 0.07 per unit of volatility. If you would invest  36,400  in Atalaya Mining on October 12, 2024 and sell it today you would earn a total of  800.00  from holding Atalaya Mining or generate 2.2% return on investment over 90 days.

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

Lundin Mining Corp  vs.  Atalaya Mining

Lundin Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lundin Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Atalaya Mining

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Atalaya Mining are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Atalaya Mining is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Lundin Mining and Atalaya Mining

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

The idea behind Lundin Mining Corp and Atalaya Mining 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.