Correlation Between Aptitude Software and Lundin Mining

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

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

Diversification Opportunities for Aptitude Software and Lundin Mining

0.37

Correlation Coefficient

Aptitude Software  Lundin Mining

Weak diversification

The 3 months correlation between Aptitude and Lundin is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Aptitude Software Group and Lundin Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Mining Corp and Aptitude Software 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 Aptitude Software Group are associated (or correlated) with Lundin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lundin Mining Corp has no effect on the direction of Aptitude Software i.e., Aptitude Software and Lundin Mining go up and down completely randomly.

Pair Corralation between Aptitude Software and Lundin Mining

Assuming the 90 days trading horizon Aptitude Software is expected to generate 13.49 times less return on investment than Lundin Mining. But when comparing it to its historical volatility, Aptitude Software Group is 1.14 times less risky than Lundin Mining. It trades about 0.0 of its potential returns per unit of risk. Lundin Mining Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  6,996  in Lundin Mining Corp on October 26, 2024 and sell it today you would earn a total of  2,407  from holding Lundin Mining Corp or generate 34.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Aptitude Software Group  vs.  Lundin Mining Corp

Aptitude Software

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aptitude Software Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Aptitude Software is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

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.

Pair Trading with Aptitude Software and Lundin Mining

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

The idea behind Aptitude Software Group and Lundin Mining Corp 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.