Correlation Between Lundin Mining and Beeks Trading

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

Diversification Opportunities for Lundin Mining and Beeks Trading

-0.44

Correlation Coefficient

Lundin Mining  Beeks Trading

Very good diversification

The 3 months correlation between Lundin and Beeks is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and Beeks Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beeks Trading 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 Beeks Trading. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beeks Trading has no effect on the direction of Lundin Mining i.e., Lundin Mining and Beeks Trading go up and down completely randomly.

Pair Corralation between Lundin Mining and Beeks Trading

Assuming the 90 days trading horizon Lundin Mining Corp is expected to under-perform the Beeks Trading. But the stock apears to be less risky and, when comparing its historical volatility, Lundin Mining Corp is 1.27 times less risky than Beeks Trading. The stock trades about -0.16 of its potential returns per unit of risk. The Beeks Trading is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  27,000  in Beeks Trading on October 8, 2024 and sell it today you would earn a total of  2,200  from holding Beeks Trading or generate 8.15% return on investment over 90 days.

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

Lundin Mining Corp  vs.  Beeks Trading

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

Beeks Trading

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Beeks Trading are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Beeks Trading may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Lundin Mining and Beeks Trading

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

The idea behind Lundin Mining Corp and Beeks Trading 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.