Correlation Between Lundin Mining and Symphony Environmental

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

Diversification Opportunities for Lundin Mining and Symphony Environmental

0.1

Correlation Coefficient

Lundin Mining  Symphony Environmental

Average diversification

The 3 months correlation between Lundin and Symphony is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and Symphony Environmental Technol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Symphony Environmental 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 Symphony Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Symphony Environmental has no effect on the direction of Lundin Mining i.e., Lundin Mining and Symphony Environmental go up and down completely randomly.

Pair Corralation between Lundin Mining and Symphony Environmental

Assuming the 90 days trading horizon Lundin Mining Corp is expected to under-perform the Symphony Environmental. In addition to that, Lundin Mining is 1.12 times more volatile than Symphony Environmental Technologies. It trades about -0.04 of its total potential returns per unit of risk. Symphony Environmental Technologies is currently generating about 0.0 per unit of volatility. If you would invest  290.00  in Symphony Environmental Technologies on December 29, 2024 and sell it today you would lose (5.00) from holding Symphony Environmental Technologies or give up 1.72% of portfolio value over 90 days.

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

Lundin Mining Corp  vs.  Symphony Environmental Technol

Lundin Mining Corp

Risk-Adjusted Performance

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.

Symphony Environmental

Risk-Adjusted Performance

Very Weak

Over the last 90 days Symphony Environmental Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Symphony Environmental is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Lundin Mining and Symphony Environmental

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

The idea behind Lundin Mining Corp and Symphony Environmental Technologies 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.