Correlation Between OptiCept Technologies and Lundin Mining

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

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

Diversification Opportunities for OptiCept Technologies and Lundin Mining

0.46

Correlation Coefficient

OptiCept Technologies  Lundin Mining

Very weak diversification

The 3 months correlation between OptiCept and Lundin is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding OptiCept Technologies AB and Lundin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Mining and OptiCept Technologies 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 OptiCept Technologies 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 OptiCept Technologies i.e., OptiCept Technologies and Lundin Mining go up and down completely randomly.

Pair Corralation between OptiCept Technologies and Lundin Mining

Assuming the 90 days trading horizon OptiCept Technologies AB is expected to under-perform the Lundin Mining. In addition to that, OptiCept Technologies is 1.86 times more volatile than Lundin Mining. It trades about -0.17 of its total potential returns per unit of risk. Lundin Mining is currently generating about -0.01 per unit of volatility. If you would invest  9,635  in Lundin Mining on October 25, 2024 and sell it today you would lose (85.00) from holding Lundin Mining or give up 0.88% of portfolio value over 90 days.

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

OptiCept Technologies AB  vs.  Lundin Mining

OptiCept Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OptiCept Technologies AB 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 February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Lundin Mining

Risk-Adjusted Performance

0 of 100

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 February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with OptiCept Technologies and Lundin Mining

The main advantage of trading using opposite OptiCept Technologies and Lundin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OptiCept Technologies 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 OptiCept Technologies 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.