Correlation Between Lundin Mining and Concurrent Technologies

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

Diversification Opportunities for Lundin Mining and Concurrent Technologies

-0.3

Correlation Coefficient

Lundin Mining  Concurrent Technologies

Very good diversification

The 3 months correlation between Lundin and Concurrent is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and Concurrent Technologies Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concurrent Technologies 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 Concurrent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concurrent Technologies has no effect on the direction of Lundin Mining i.e., Lundin Mining and Concurrent Technologies go up and down completely randomly.

Pair Corralation between Lundin Mining and Concurrent Technologies

Assuming the 90 days trading horizon Lundin Mining Corp is expected to under-perform the Concurrent Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Lundin Mining Corp is 1.36 times less risky than Concurrent Technologies. The stock trades about -0.08 of its potential returns per unit of risk. The Concurrent Technologies Plc is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  11,150  in Concurrent Technologies Plc on October 26, 2024 and sell it today you would earn a total of  6,650  from holding Concurrent Technologies Plc or generate 59.64% return on investment over 90 days.

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

Lundin Mining Corp  vs.  Concurrent Technologies Plc

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 unsteady 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.

Concurrent Technologies

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Concurrent Technologies Plc are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Concurrent Technologies exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lundin Mining and Concurrent Technologies

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

The idea behind Lundin Mining Corp and Concurrent Technologies Plc 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.