Correlation Between Lundin Mining and Zoom Video
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and Zoom Video 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 Lundin Mining and Zoom Video into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lundin Mining Corp and Zoom Video Communications, you can compare the effects of market volatilities on Lundin Mining and Zoom Video 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 Lundin Mining with a short position of Zoom Video. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Zoom Video.
Diversification Opportunities for Lundin Mining and Zoom Video
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lundin and Zoom is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and Zoom Video Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoom Video Communications and Lundin Mining 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 Lundin Mining Corp are associated (or correlated) with Zoom Video. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoom Video Communications has no effect on the direction of Lundin Mining i.e., Lundin Mining and Zoom Video go up and down completely randomly.
Pair Corralation between Lundin Mining and Zoom Video
Assuming the 90 days trading horizon Lundin Mining is expected to generate 3.74 times less return on investment than Zoom Video. But when comparing it to its historical volatility, Lundin Mining Corp is 1.39 times less risky than Zoom Video. It trades about 0.06 of its potential returns per unit of risk. Zoom Video Communications is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 7,554 in Zoom Video Communications on September 2, 2024 and sell it today you would earn a total of 810.00 from holding Zoom Video Communications or generate 10.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lundin Mining Corp vs. Zoom Video Communications
Performance |
| Timeline |
| Lundin Mining Corp |
| Zoom Video Communications |
Lundin Mining and Zoom Video Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and Zoom Video
The main advantage of trading using opposite Lundin Mining and Zoom Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, Zoom Video 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 Zoom Video will offset losses from the drop in Zoom Video's long position.| 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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