Correlation Between Lundin Mining and GREENX METALS
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and GREENX METALS 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 GREENX METALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lundin Mining and GREENX METALS LTD, you can compare the effects of market volatilities on Lundin Mining and GREENX METALS 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 GREENX METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and GREENX METALS.
Diversification Opportunities for Lundin Mining and GREENX METALS
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lundin and GREENX is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining and GREENX METALS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GREENX METALS LTD 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 are associated (or correlated) with GREENX METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GREENX METALS LTD has no effect on the direction of Lundin Mining i.e., Lundin Mining and GREENX METALS go up and down completely randomly.
Pair Corralation between Lundin Mining and GREENX METALS
Assuming the 90 days horizon Lundin Mining is expected to generate 0.58 times more return on investment than GREENX METALS. However, Lundin Mining is 1.73 times less risky than GREENX METALS. It trades about 0.04 of its potential returns per unit of risk. GREENX METALS LTD is currently generating about -0.01 per unit of risk. If you would invest 706.00 in Lundin Mining on September 25, 2024 and sell it today you would earn a total of 132.00 from holding Lundin Mining or generate 18.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 99.6% |
Values | Daily Returns |
Lundin Mining vs. GREENX METALS LTD
Performance |
Timeline |
Lundin Mining |
GREENX METALS LTD |
Lundin Mining and GREENX METALS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lundin Mining and GREENX METALS
The main advantage of trading using opposite Lundin Mining and GREENX METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, GREENX METALS 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 GREENX METALS will offset losses from the drop in GREENX METALS's long position.Lundin Mining vs. Tsingtao Brewery | Lundin Mining vs. National Beverage Corp | Lundin Mining vs. MOLSON RS BEVERAGE | Lundin Mining vs. Natural Health Trends |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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