Correlation Between Lundin Gold and Getty Copper

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

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

Diversification Opportunities for Lundin Gold and Getty Copper

0.08

Correlation Coefficient

Lundin Gold  Getty Copper

Significant diversification

The 3 months correlation between Lundin and Getty is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Gold and Getty Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getty Copper and Lundin Gold 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 Gold are associated (or correlated) with Getty Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getty Copper has no effect on the direction of Lundin Gold i.e., Lundin Gold and Getty Copper go up and down completely randomly.

Pair Corralation between Lundin Gold and Getty Copper

Assuming the 90 days trading horizon Lundin Gold is expected to generate 0.17 times more return on investment than Getty Copper. However, Lundin Gold is 5.74 times less risky than Getty Copper. It trades about -0.21 of its potential returns per unit of risk. Getty Copper is currently generating about -0.08 per unit of risk. If you would invest  3,475  in Lundin Gold on October 6, 2024 and sell it today you would lose (278.00) from holding Lundin Gold or give up 8.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Lundin Gold  vs.  Getty Copper

Lundin Gold

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lundin Gold are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

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.

Pair Trading with Lundin Gold and Getty Copper

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

The idea behind Lundin Gold and Getty Copper 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.