Correlation Between Havsfrun Investment and Lundin Mining

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

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

Diversification Opportunities for Havsfrun Investment and Lundin Mining

-0.49

Correlation Coefficient

Havsfrun Investment  Lundin Mining

Very good diversification

The 3 months correlation between Havsfrun and Lundin is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Havsfrun Investment AB and Lundin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Mining and Havsfrun Investment 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 Havsfrun Investment AB 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 Havsfrun Investment i.e., Havsfrun Investment and Lundin Mining go up and down completely randomly.

Pair Corralation between Havsfrun Investment and Lundin Mining

Assuming the 90 days trading horizon Havsfrun Investment AB is expected to generate 2.11 times more return on investment than Lundin Mining. However, Havsfrun Investment is 2.11 times more volatile than Lundin Mining. It trades about 0.21 of its potential returns per unit of risk. Lundin Mining is currently generating about -0.04 per unit of risk. If you would invest  1,245  in Havsfrun Investment AB on December 24, 2024 and sell it today you would earn a total of  995.00  from holding Havsfrun Investment AB or generate 79.92% return on investment over 90 days.

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

Havsfrun Investment AB  vs.  Lundin Mining

Havsfrun Investment

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Havsfrun Investment AB are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Havsfrun Investment unveiled solid returns over the last few months and may actually be approaching a breakup point.

Lundin Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lundin Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain 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 Havsfrun Investment and Lundin Mining

The main advantage of trading using opposite Havsfrun Investment and Lundin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Havsfrun Investment 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 Havsfrun Investment AB and Lundin Mining 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.