Correlation Between Host Hotels and Lundin Mining
Can any of the company-specific risk be diversified away by investing in both Host Hotels 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 Host Hotels and Lundin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Host Hotels Resorts and Lundin Mining Corp, you can compare the effects of market volatilities on Host Hotels 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 Host Hotels with a short position of Lundin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Host Hotels and Lundin Mining.
Diversification Opportunities for Host Hotels and Lundin Mining
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Host and Lundin is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Host Hotels Resorts 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 Host Hotels 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 Host Hotels Resorts 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 Host Hotels i.e., Host Hotels and Lundin Mining go up and down completely randomly.
Pair Corralation between Host Hotels and Lundin Mining
Assuming the 90 days trading horizon Host Hotels Resorts is expected to under-perform the Lundin Mining. But the stock apears to be less risky and, when comparing its historical volatility, Host Hotels Resorts is 1.99 times less risky than Lundin Mining. The stock trades about -0.17 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 9,583 in Lundin Mining Corp on October 23, 2024 and sell it today you would earn a total of 165.00 from holding Lundin Mining Corp or generate 1.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Host Hotels Resorts vs. Lundin Mining Corp
Performance |
| Timeline |
| Host Hotels Resorts |
| Lundin Mining Corp |
Host Hotels and Lundin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Host Hotels and Lundin Mining
The main advantage of trading using opposite Host Hotels and Lundin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Host Hotels 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.| Host Hotels vs. Cardinal Health | Host Hotels vs. European Metals Holdings | Host Hotels vs. Eco Animal Health | Host Hotels vs. Omega Healthcare Investors |
| Lundin Mining vs. Thor Mining PLC | Lundin Mining vs. Hecla Mining Co | Lundin Mining vs. Vienna Insurance Group | Lundin Mining vs. Eastinco Mining Exploration |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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