Correlation Between Lundin Energy and TAMURA P

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

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

Diversification Opportunities for Lundin Energy and TAMURA P

0.49

Correlation Coefficient

Lundin Energy  TAMURA P

Very weak diversification

The 3 months correlation between Lundin and TAMURA is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Energy AB and TAMURA P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAMURA P and Lundin Energy 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 Energy AB are associated (or correlated) with TAMURA P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAMURA P has no effect on the direction of Lundin Energy i.e., Lundin Energy and TAMURA P go up and down completely randomly.

Pair Corralation between Lundin Energy and TAMURA P

Assuming the 90 days horizon Lundin Energy AB is expected to generate 1.66 times more return on investment than TAMURA P. However, Lundin Energy is 1.66 times more volatile than TAMURA P. It trades about -0.01 of its potential returns per unit of risk. TAMURA P is currently generating about -0.18 per unit of risk. If you would invest  67.00  in Lundin Energy AB on October 8, 2024 and sell it today you would lose (2.00) from holding Lundin Energy AB or give up 2.99% of portfolio value over 90 days.

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

Lundin Energy AB  vs.  TAMURA P

Lundin Energy AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lundin Energy AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Lundin Energy is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

TAMURA P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TAMURA P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Lundin Energy and TAMURA P

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

The idea behind Lundin Energy AB and TAMURA P 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.