Correlation Between Grieg Seafood and Lundin Mining
Can any of the company-specific risk be diversified away by investing in both Grieg Seafood 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 Grieg Seafood and Lundin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grieg Seafood and Lundin Mining Corp, you can compare the effects of market volatilities on Grieg Seafood 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 Grieg Seafood with a short position of Lundin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grieg Seafood and Lundin Mining.
Diversification Opportunities for Grieg Seafood and Lundin Mining
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grieg and Lundin is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Grieg Seafood and Lundin Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Mining Corp and Grieg Seafood 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 Grieg Seafood 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 Corp has no effect on the direction of Grieg Seafood i.e., Grieg Seafood and Lundin Mining go up and down completely randomly.
Pair Corralation between Grieg Seafood and Lundin Mining
Assuming the 90 days trading horizon Grieg Seafood is expected to generate 1.7 times more return on investment than Lundin Mining. However, Grieg Seafood is 1.7 times more volatile than Lundin Mining Corp. It trades about 0.25 of its potential returns per unit of risk. Lundin Mining Corp is currently generating about -0.15 per unit of risk. If you would invest 6,235 in Grieg Seafood on November 4, 2024 and sell it today you would earn a total of 1,210 from holding Grieg Seafood or generate 19.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grieg Seafood vs. Lundin Mining Corp
Performance |
| Timeline |
| Grieg Seafood |
| Lundin Mining Corp |
Grieg Seafood and Lundin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grieg Seafood and Lundin Mining
The main advantage of trading using opposite Grieg Seafood and Lundin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grieg Seafood 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.| Grieg Seafood vs. Scandinavian Tobacco Group | Grieg Seafood vs. Cairo Communication SpA | Grieg Seafood vs. Westlake Chemical Corp | Grieg Seafood vs. Cairn Homes PLC |
| Lundin Mining vs. Cornish Metals | Lundin Mining vs. GoldMining | Lundin Mining vs. Eastinco Mining Exploration | Lundin Mining vs. BW Offshore |
Check out your portfolio center.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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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