Correlation Between Lundin Mining and Liberty Media
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and Liberty Media 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 Liberty Media 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 Liberty Media Corp, you can compare the effects of market volatilities on Lundin Mining and Liberty Media 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 Liberty Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Liberty Media.
Diversification Opportunities for Lundin Mining and Liberty Media
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lundin and Liberty is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and Liberty Media Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Media Corp 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 Liberty Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Media Corp has no effect on the direction of Lundin Mining i.e., Lundin Mining and Liberty Media go up and down completely randomly.
Pair Corralation between Lundin Mining and Liberty Media
Assuming the 90 days trading horizon Lundin Mining Corp is expected to under-perform the Liberty Media. In addition to that, Lundin Mining is 2.77 times more volatile than Liberty Media Corp. It trades about -0.06 of its total potential returns per unit of risk. Liberty Media Corp is currently generating about 0.06 per unit of volatility. If you would invest 8,423 in Liberty Media Corp on October 29, 2024 and sell it today you would earn a total of 81.00 from holding Liberty Media Corp or generate 0.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lundin Mining Corp vs. Liberty Media Corp
Performance |
| Timeline |
| Lundin Mining Corp |
| Liberty Media Corp |
Lundin Mining and Liberty Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and Liberty Media
The main advantage of trading using opposite Lundin Mining and Liberty Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, Liberty Media 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 Liberty Media will offset losses from the drop in Liberty Media's long position.| Lundin Mining vs. Finnair Oyj | Lundin Mining vs. Porvair plc | Lundin Mining vs. Sealed Air Corp | Lundin Mining vs. Fair Oaks Income |
| Liberty Media vs. Bellevue Healthcare Trust | Liberty Media vs. Axfood AB | Liberty Media vs. CleanTech Lithium plc | Liberty Media vs. HCA Healthcare |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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