Correlation Between Sparebank and Lundin Mining
Can any of the company-specific risk be diversified away by investing in both Sparebank 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 Sparebank and Lundin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparebank 1 SR and Lundin Mining Corp, you can compare the effects of market volatilities on Sparebank 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 Sparebank with a short position of Lundin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparebank and Lundin Mining.
Diversification Opportunities for Sparebank and Lundin Mining
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sparebank and Lundin is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Sparebank 1 SR 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 Sparebank 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 Sparebank 1 SR 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 Sparebank i.e., Sparebank and Lundin Mining go up and down completely randomly.
Pair Corralation between Sparebank and Lundin Mining
Assuming the 90 days trading horizon Sparebank 1 SR is expected to generate 0.39 times more return on investment than Lundin Mining. However, Sparebank 1 SR is 2.54 times less risky than Lundin Mining. It trades about 0.16 of its potential returns per unit of risk. Lundin Mining Corp is currently generating about -0.02 per unit of risk. If you would invest 13,240 in Sparebank 1 SR on November 3, 2024 and sell it today you would earn a total of 2,980 from holding Sparebank 1 SR or generate 22.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sparebank 1 SR vs. Lundin Mining Corp
Performance |
| Timeline |
| Sparebank 1 SR |
| Lundin Mining Corp |
Sparebank and Lundin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparebank and Lundin Mining
The main advantage of trading using opposite Sparebank and Lundin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparebank 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.| Sparebank vs. Dairy Farm International | Sparebank vs. Capital Metals PLC | Sparebank vs. Westlake Chemical Corp | Sparebank vs. Central Asia Metals |
| Lundin Mining vs. Taiwan Semiconductor Manufacturing | Lundin Mining vs. Liontrust Asset Management | Lundin Mining vs. G5 Entertainment AB | Lundin Mining vs. Jupiter Fund Management |
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.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |