Correlation Between Ion Beam and Lundin Mining
Can any of the company-specific risk be diversified away by investing in both Ion Beam 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 Ion Beam and Lundin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ion Beam Applications and Lundin Mining Corp, you can compare the effects of market volatilities on Ion Beam 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 Ion Beam with a short position of Lundin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ion Beam and Lundin Mining.
Diversification Opportunities for Ion Beam and Lundin Mining
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ion and Lundin is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Ion Beam Applications 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 Ion Beam 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 Ion Beam Applications 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 Ion Beam i.e., Ion Beam and Lundin Mining go up and down completely randomly.
Pair Corralation between Ion Beam and Lundin Mining
Assuming the 90 days trading horizon Ion Beam Applications is expected to under-perform the Lundin Mining. But the stock apears to be less risky and, when comparing its historical volatility, Ion Beam Applications is 1.04 times less risky than Lundin Mining. The stock trades about 0.0 of its potential returns per unit of risk. The Lundin Mining Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 7,658 in Lundin Mining Corp on August 27, 2024 and sell it today you would earn a total of 3,462 from holding Lundin Mining Corp or generate 45.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Ion Beam Applications vs. Lundin Mining Corp
Performance |
| Timeline |
| Ion Beam Applications |
| Lundin Mining Corp |
Ion Beam and Lundin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ion Beam and Lundin Mining
The main advantage of trading using opposite Ion Beam and Lundin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ion Beam 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.| Ion Beam vs. Cairo Communication SpA | Ion Beam vs. Orient Telecoms | Ion Beam vs. Futura Medical | Ion Beam vs. CompuGroup Medical AG |
| Lundin Mining vs. Samsung Electronics Co | Lundin Mining vs. Samsung Electronics Co | Lundin Mining vs. Hyundai Motor | Lundin Mining vs. Toyota Motor Corp |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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