Correlation Between Lundin Mining and Pfeiffer Vacuum
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and Pfeiffer Vacuum 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 Pfeiffer Vacuum 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 Pfeiffer Vacuum Technology, you can compare the effects of market volatilities on Lundin Mining and Pfeiffer Vacuum 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 Pfeiffer Vacuum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Pfeiffer Vacuum.
Diversification Opportunities for Lundin Mining and Pfeiffer Vacuum
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lundin and Pfeiffer is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and Pfeiffer Vacuum Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfeiffer Vacuum Tech 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 Pfeiffer Vacuum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pfeiffer Vacuum Tech has no effect on the direction of Lundin Mining i.e., Lundin Mining and Pfeiffer Vacuum go up and down completely randomly.
Pair Corralation between Lundin Mining and Pfeiffer Vacuum
Assuming the 90 days trading horizon Lundin Mining Corp is expected to generate 5.41 times more return on investment than Pfeiffer Vacuum. However, Lundin Mining is 5.41 times more volatile than Pfeiffer Vacuum Technology. It trades about 0.01 of its potential returns per unit of risk. Pfeiffer Vacuum Technology is currently generating about 0.04 per unit of risk. If you would invest 10,880 in Lundin Mining Corp on August 29, 2024 and sell it today you would lose (20.00) from holding Lundin Mining Corp or give up 0.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lundin Mining Corp vs. Pfeiffer Vacuum Technology
Performance |
| Timeline |
| Lundin Mining Corp |
| Pfeiffer Vacuum Tech |
Lundin Mining and Pfeiffer Vacuum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and Pfeiffer Vacuum
The main advantage of trading using opposite Lundin Mining and Pfeiffer Vacuum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, Pfeiffer Vacuum 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 Pfeiffer Vacuum will offset losses from the drop in Pfeiffer Vacuum's long position.| Lundin Mining vs. Lendinvest PLC | Lundin Mining vs. Neometals | Lundin Mining vs. Coor Service Management | Lundin Mining vs. Albion Technology General |
| Pfeiffer Vacuum vs. Lendinvest PLC | Pfeiffer Vacuum vs. Neometals | Pfeiffer Vacuum vs. Coor Service Management | Pfeiffer Vacuum vs. Albion Technology General |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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