Correlation Between Alzinova and Lundin Gold

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

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

Diversification Opportunities for Alzinova and Lundin Gold

-0.73

Correlation Coefficient

Alzinova  Lundin Gold

Pay attention - limited upside

The 3 months correlation between Alzinova and Lundin is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Alzinova AB and Lundin Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Gold and Alzinova 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 Alzinova AB are associated (or correlated) with Lundin Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lundin Gold has no effect on the direction of Alzinova i.e., Alzinova and Lundin Gold go up and down completely randomly.

Pair Corralation between Alzinova and Lundin Gold

Assuming the 90 days trading horizon Alzinova AB is expected to under-perform the Lundin Gold. In addition to that, Alzinova is 1.2 times more volatile than Lundin Gold. It trades about -0.14 of its total potential returns per unit of risk. Lundin Gold is currently generating about 0.19 per unit of volatility. If you would invest  23,097  in Lundin Gold on December 30, 2024 and sell it today you would earn a total of  7,403  from holding Lundin Gold or generate 32.05% return on investment over 90 days.

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

Alzinova AB  vs.  Lundin Gold

Alzinova AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alzinova AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Lundin Gold

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lundin Gold are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Lundin Gold unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alzinova and Lundin Gold

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

The idea behind Alzinova AB and Lundin Gold 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.