Correlation Between Dorel Industries and Lundin Mining
Can any of the company-specific risk be diversified away by investing in both Dorel Industries 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 Dorel Industries and Lundin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dorel Industries and Lundin Mining, you can compare the effects of market volatilities on Dorel Industries 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 Dorel Industries with a short position of Lundin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dorel Industries and Lundin Mining.
Diversification Opportunities for Dorel Industries and Lundin Mining
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dorel and Lundin is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Dorel Industries and Lundin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Mining and Dorel Industries 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 Dorel Industries 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 has no effect on the direction of Dorel Industries i.e., Dorel Industries and Lundin Mining go up and down completely randomly.
Pair Corralation between Dorel Industries and Lundin Mining
Assuming the 90 days trading horizon Dorel Industries is expected to generate 2.03 times more return on investment than Lundin Mining. However, Dorel Industries is 2.03 times more volatile than Lundin Mining. It trades about 0.0 of its potential returns per unit of risk. Lundin Mining is currently generating about -0.11 per unit of risk. If you would invest 441.00 in Dorel Industries on December 1, 2024 and sell it today you would lose (29.00) from holding Dorel Industries or give up 6.58% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Dorel Industries vs. Lundin Mining
Performance |
Timeline |
Dorel Industries |
Lundin Mining |
Dorel Industries and Lundin Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dorel Industries and Lundin Mining
The main advantage of trading using opposite Dorel Industries and Lundin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dorel Industries 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.Dorel Industries vs. Transcontinental | Dorel Industries vs. Gildan Activewear | Dorel Industries vs. Cogeco Communications | Dorel Industries vs. High Liner Foods |
Lundin Mining vs. HudBay Minerals | Lundin Mining vs. First Quantum Minerals | Lundin Mining vs. Ivanhoe Mines | Lundin Mining vs. Capstone Mining Corp |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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