Correlation Between Charter Communications and Lundin Mining
Can any of the company-specific risk be diversified away by investing in both Charter Communications 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 Charter Communications and Lundin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Charter Communications Cl and Lundin Mining Corp, you can compare the effects of market volatilities on Charter Communications 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 Charter Communications with a short position of Lundin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Communications and Lundin Mining.
Diversification Opportunities for Charter Communications and Lundin Mining
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Charter and Lundin is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Charter Communications Cl 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 Charter Communications 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 Charter Communications Cl 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 Charter Communications i.e., Charter Communications and Lundin Mining go up and down completely randomly.
Pair Corralation between Charter Communications and Lundin Mining
Assuming the 90 days trading horizon Charter Communications Cl is expected to under-perform the Lundin Mining. In addition to that, Charter Communications is 1.17 times more volatile than Lundin Mining Corp. It trades about -0.09 of its total potential returns per unit of risk. Lundin Mining Corp is currently generating about -0.04 per unit of volatility. If you would invest 10,585 in Lundin Mining Corp on September 12, 2024 and sell it today you would lose (235.00) from holding Lundin Mining Corp or give up 2.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charter Communications Cl vs. Lundin Mining Corp
Performance |
| Timeline |
| Charter Communications |
| Lundin Mining Corp |
Charter Communications and Lundin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Communications and Lundin Mining
The main advantage of trading using opposite Charter Communications and Lundin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Communications 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.| Charter Communications vs. Hong Kong Land | Charter Communications vs. Neometals | Charter Communications vs. Coor Service Management | Charter Communications vs. Fidelity Sustainable USD |
| Lundin Mining vs. Hong Kong Land | Lundin Mining vs. Neometals | Lundin Mining vs. Coor Service Management | Lundin Mining vs. Fidelity Sustainable USD |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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