Correlation Between Lundin Mining and DXC Technology
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and DXC Technology 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 DXC Technology 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 DXC Technology Co, you can compare the effects of market volatilities on Lundin Mining and DXC Technology 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 DXC Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and DXC Technology.
Diversification Opportunities for Lundin Mining and DXC Technology
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lundin and DXC is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and DXC Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DXC Technology 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 DXC Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DXC Technology has no effect on the direction of Lundin Mining i.e., Lundin Mining and DXC Technology go up and down completely randomly.
Pair Corralation between Lundin Mining and DXC Technology
Assuming the 90 days trading horizon Lundin Mining Corp is expected to generate 1.17 times more return on investment than DXC Technology. However, Lundin Mining is 1.17 times more volatile than DXC Technology Co. It trades about 0.09 of its potential returns per unit of risk. DXC Technology Co is currently generating about 0.07 per unit of risk. If you would invest 9,353 in Lundin Mining Corp on September 3, 2024 and sell it today you would earn a total of 1,402 from holding Lundin Mining Corp or generate 14.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lundin Mining Corp vs. DXC Technology Co
Performance |
| Timeline |
| Lundin Mining Corp |
| DXC Technology |
Lundin Mining and DXC Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and DXC Technology
The main advantage of trading using opposite Lundin Mining and DXC Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, DXC Technology 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 DXC Technology will offset losses from the drop in DXC Technology's long position.| Lundin Mining vs. CVS Health Corp | Lundin Mining vs. Optima Health plc | Lundin Mining vs. Primary Health Properties | Lundin Mining vs. Worldwide Healthcare Trust |
| DXC Technology vs. Home Depot | DXC Technology vs. Synthomer plc | DXC Technology vs. DFS Furniture PLC | DXC Technology vs. Westlake Chemical Corp |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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