Correlation Between Getty Copper and Lundin Gold

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

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

Diversification Opportunities for Getty Copper and Lundin Gold

0.44

Correlation Coefficient

Getty Copper  Lundin Gold

Very weak diversification

The 3 months correlation between Getty and Lundin is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Getty Copper and Lundin Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Gold and Getty Copper 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 Getty Copper 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 Getty Copper i.e., Getty Copper and Lundin Gold go up and down completely randomly.

Pair Corralation between Getty Copper and Lundin Gold

Assuming the 90 days horizon Getty Copper is expected to generate 3.91 times more return on investment than Lundin Gold. However, Getty Copper is 3.91 times more volatile than Lundin Gold. It trades about 0.04 of its potential returns per unit of risk. Lundin Gold is currently generating about 0.1 per unit of risk. If you would invest  5.00  in Getty Copper on October 21, 2024 and sell it today you would lose (1.00) from holding Getty Copper or give up 20.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.81%
Values	Daily Returns

Getty Copper  vs.  Lundin Gold

Getty Copper

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Getty Copper 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 fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Lundin Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lundin Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Lundin Gold is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Getty Copper and Lundin Gold

The main advantage of trading using opposite Getty Copper and Lundin Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Getty Copper 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 Getty Copper 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.