Correlation Between Mundoro Capital and Lundin Gold

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

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

Diversification Opportunities for Mundoro Capital and Lundin Gold

0.41

Correlation Coefficient

Mundoro Capital  Lundin Gold

Very weak diversification

The 3 months correlation between Mundoro and Lundin is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Mundoro Capital and Lundin Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Gold and Mundoro Capital 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 Mundoro Capital are associated (or correlated) with Lundin Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lundin Gold has no effect on the direction of Mundoro Capital i.e., Mundoro Capital and Lundin Gold go up and down completely randomly.

Pair Corralation between Mundoro Capital and Lundin Gold

Assuming the 90 days horizon Mundoro Capital is expected to generate 30.05 times less return on investment than Lundin Gold. But when comparing it to its historical volatility, Mundoro Capital is 1.13 times less risky than Lundin Gold. It trades about 0.01 of its potential returns per unit of risk. Lundin Gold is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  3,143  in Lundin Gold on October 22, 2024 and sell it today you would earn a total of  310.00  from holding Lundin Gold or generate 9.86% return on investment over 90 days.

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

Mundoro Capital  vs.  Lundin Gold

Mundoro Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mundoro Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Lundin Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lundin Gold has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Pair Trading with Mundoro Capital and Lundin Gold

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

The idea behind Mundoro Capital and Lundin Gold 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.