Correlation Between Uniper SE and Lundin Mining
Can any of the company-specific risk be diversified away by investing in both Uniper SE 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 Uniper SE and Lundin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uniper SE and Lundin Mining Corp, you can compare the effects of market volatilities on Uniper SE 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 Uniper SE with a short position of Lundin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uniper SE and Lundin Mining.
Diversification Opportunities for Uniper SE and Lundin Mining
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Uniper and Lundin is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Uniper SE 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 Uniper SE 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 Uniper SE 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 Uniper SE i.e., Uniper SE and Lundin Mining go up and down completely randomly.
Pair Corralation between Uniper SE and Lundin Mining
Assuming the 90 days trading horizon Uniper SE is expected to generate 26.28 times less return on investment than Lundin Mining. In addition to that, Uniper SE is 1.52 times more volatile than Lundin Mining Corp. It trades about 0.0 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 6,867 in Lundin Mining Corp on September 28, 2024 and sell it today you would earn a total of 2,943 from holding Lundin Mining Corp or generate 42.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Uniper SE vs. Lundin Mining Corp
Performance |
| Timeline |
| Uniper SE |
| Lundin Mining Corp |
Uniper SE and Lundin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uniper SE and Lundin Mining
The main advantage of trading using opposite Uniper SE and Lundin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uniper SE 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.| Uniper SE vs. Mulberry Group PLC | Uniper SE vs. London Security Plc | Uniper SE vs. Triad Group PLC | Uniper SE vs. SURETRACK MON |
| Lundin Mining vs. Uniper SE | Lundin Mining vs. Mulberry Group PLC | Lundin Mining vs. London Security Plc | Lundin Mining vs. Triad Group PLC |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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