Correlation Between Lundin Mining and Darden Restaurants
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and Darden Restaurants 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 Darden Restaurants 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 Darden Restaurants, you can compare the effects of market volatilities on Lundin Mining and Darden Restaurants 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 Darden Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Darden Restaurants.
Diversification Opportunities for Lundin Mining and Darden Restaurants
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lundin and Darden is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and Darden Restaurants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Darden Restaurants 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 Darden Restaurants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Darden Restaurants has no effect on the direction of Lundin Mining i.e., Lundin Mining and Darden Restaurants go up and down completely randomly.
Pair Corralation between Lundin Mining and Darden Restaurants
Assuming the 90 days trading horizon Lundin Mining Corp is expected to generate 1.93 times more return on investment than Darden Restaurants. However, Lundin Mining is 1.93 times more volatile than Darden Restaurants. It trades about 0.06 of its potential returns per unit of risk. Darden Restaurants is currently generating about 0.04 per unit of risk. If you would invest 6,032 in Lundin Mining Corp on August 27, 2024 and sell it today you would earn a total of 5,088 from holding Lundin Mining Corp or generate 84.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 92.79% |
| Values | Daily Returns |
Lundin Mining Corp vs. Darden Restaurants
Performance |
| Timeline |
| Lundin Mining Corp |
| Darden Restaurants |
Lundin Mining and Darden Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and Darden Restaurants
The main advantage of trading using opposite Lundin Mining and Darden Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, Darden Restaurants 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 Darden Restaurants will offset losses from the drop in Darden Restaurants' long position.| Lundin Mining vs. Samsung Electronics Co | Lundin Mining vs. Samsung Electronics Co | Lundin Mining vs. Hyundai Motor | Lundin Mining vs. Toyota Motor Corp |
| Darden Restaurants vs. Samsung Electronics Co | Darden Restaurants vs. Samsung Electronics Co | Darden Restaurants vs. Hyundai Motor | Darden Restaurants vs. Toyota Motor 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |