Correlation Between Infrastrutture Wireless and Lundin Mining
Can any of the company-specific risk be diversified away by investing in both Infrastrutture Wireless 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 Infrastrutture Wireless and Lundin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infrastrutture Wireless Italiane and Lundin Mining Corp, you can compare the effects of market volatilities on Infrastrutture Wireless 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 Infrastrutture Wireless with a short position of Lundin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infrastrutture Wireless and Lundin Mining.
Diversification Opportunities for Infrastrutture Wireless and Lundin Mining
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Infrastrutture and Lundin is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Infrastrutture Wireless Italia 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 Infrastrutture Wireless 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 Infrastrutture Wireless Italiane 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 Infrastrutture Wireless i.e., Infrastrutture Wireless and Lundin Mining go up and down completely randomly.
Pair Corralation between Infrastrutture Wireless and Lundin Mining
Assuming the 90 days trading horizon Infrastrutture Wireless Italiane is expected to under-perform the Lundin Mining. But the stock apears to be less risky and, when comparing its historical volatility, Infrastrutture Wireless Italiane is 1.46 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 0.06 of returns per unit of risk over similar time horizon. If you would invest 10,491 in Lundin Mining Corp on September 2, 2024 and sell it today you would earn a total of 264.00 from holding Lundin Mining Corp or generate 2.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Infrastrutture Wireless Italia vs. Lundin Mining Corp
Performance |
| Timeline |
| Infrastrutture Wireless |
| Lundin Mining Corp |
Infrastrutture Wireless and Lundin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infrastrutture Wireless and Lundin Mining
The main advantage of trading using opposite Infrastrutture Wireless and Lundin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infrastrutture Wireless 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.| Infrastrutture Wireless vs. Uniper SE | Infrastrutture Wireless vs. Mulberry Group PLC | Infrastrutture Wireless vs. London Security Plc | Infrastrutture Wireless vs. Triad Group PLC |
| Lundin Mining vs. Supermarket Income REIT | Lundin Mining vs. Ecclesiastical Insurance Office | Lundin Mining vs. Batm Advanced Communications | Lundin Mining vs. Team Internet Group |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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