Correlation Between Lundin Mining and Host Hotels
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and Host Hotels 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 Host Hotels 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 Host Hotels Resorts, you can compare the effects of market volatilities on Lundin Mining and Host Hotels 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 Host Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Host Hotels.
Diversification Opportunities for Lundin Mining and Host Hotels
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lundin and Host is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and Host Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Host Hotels Resorts 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 Host Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Host Hotels Resorts has no effect on the direction of Lundin Mining i.e., Lundin Mining and Host Hotels go up and down completely randomly.
Pair Corralation between Lundin Mining and Host Hotels
Assuming the 90 days trading horizon Lundin Mining Corp is expected to generate 1.99 times more return on investment than Host Hotels. However, Lundin Mining is 1.99 times more volatile than Host Hotels Resorts. It trades about 0.05 of its potential returns per unit of risk. Host Hotels Resorts is currently generating about -0.17 per unit of risk. If you would invest 9,583 in Lundin Mining Corp on October 23, 2024 and sell it today you would earn a total of 165.00 from holding Lundin Mining Corp or generate 1.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Lundin Mining Corp vs. Host Hotels Resorts
Performance |
| Timeline |
| Lundin Mining Corp |
| Host Hotels Resorts |
Lundin Mining and Host Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and Host Hotels
The main advantage of trading using opposite Lundin Mining and Host Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, Host Hotels 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 Host Hotels will offset losses from the drop in Host Hotels' long position.| Lundin Mining vs. Thor Mining PLC | Lundin Mining vs. Hecla Mining Co | Lundin Mining vs. Vienna Insurance Group | Lundin Mining vs. Eastinco Mining Exploration |
| Host Hotels vs. Cardinal Health | Host Hotels vs. European Metals Holdings | Host Hotels vs. Eco Animal Health | Host Hotels vs. Omega Healthcare Investors |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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