Correlation Between Lundin Mining and Nordic Asia

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

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

Diversification Opportunities for Lundin Mining and Nordic Asia

0.34

Correlation Coefficient

Lundin Mining  Nordic Asia

Weak diversification

The 3 months correlation between Lundin and Nordic is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining and Nordic Asia Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Asia Investment 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 Nordic Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Asia Investment has no effect on the direction of Lundin Mining i.e., Lundin Mining and Nordic Asia go up and down completely randomly.

Pair Corralation between Lundin Mining and Nordic Asia

Assuming the 90 days trading horizon Lundin Mining is expected to under-perform the Nordic Asia. In addition to that, Lundin Mining is 1.11 times more volatile than Nordic Asia Investment. It trades about -0.09 of its total potential returns per unit of risk. Nordic Asia Investment is currently generating about -0.05 per unit of volatility. If you would invest  294.00  in Nordic Asia Investment on December 31, 2024 and sell it today you would lose (24.00) from holding Nordic Asia Investment or give up 8.16% of portfolio value over 90 days.

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

Lundin Mining  vs.  Nordic Asia Investment

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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in May 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Nordic Asia Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nordic Asia Investment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Lundin Mining and Nordic Asia

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

The idea behind Lundin Mining and Nordic Asia Investment 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.