Correlation Between Volkswagen and Lundin Mining
Can any of the company-specific risk be diversified away by investing in both Volkswagen 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 Volkswagen and Lundin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volkswagen AG Non Vtg and Lundin Mining Corp, you can compare the effects of market volatilities on Volkswagen 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 Volkswagen with a short position of Lundin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volkswagen and Lundin Mining.
Diversification Opportunities for Volkswagen and Lundin Mining
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Volkswagen and Lundin is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Volkswagen AG Non Vtg 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 Volkswagen 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 Volkswagen AG Non Vtg 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 Volkswagen i.e., Volkswagen and Lundin Mining go up and down completely randomly.
Pair Corralation between Volkswagen and Lundin Mining
Assuming the 90 days trading horizon Volkswagen AG Non Vtg is expected to generate 0.62 times more return on investment than Lundin Mining. However, Volkswagen AG Non Vtg is 1.62 times less risky than Lundin Mining. It trades about 0.14 of its potential returns per unit of risk. Lundin Mining Corp is currently generating about -0.09 per unit of risk. If you would invest 8,610 in Volkswagen AG Non Vtg on October 12, 2024 and sell it today you would earn a total of 368.00 from holding Volkswagen AG Non Vtg or generate 4.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Volkswagen AG Non Vtg vs. Lundin Mining Corp
Performance |
| Timeline |
| Volkswagen AG Non |
| Lundin Mining Corp |
Volkswagen and Lundin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volkswagen and Lundin Mining
The main advantage of trading using opposite Volkswagen and Lundin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volkswagen 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.| Volkswagen vs. DFS Furniture PLC | Volkswagen vs. Atalaya Mining | Volkswagen vs. Panther Metals PLC | Volkswagen vs. Cornish Metals |
| Lundin Mining vs. Walmart | Lundin Mining vs. BYD Co | Lundin Mining vs. Volkswagen AG | Lundin Mining vs. Volkswagen AG Non Vtg |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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