Correlation Between Lundin Mining and Park Hotels
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and Park 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 Park 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 Park Hotels Resorts, you can compare the effects of market volatilities on Lundin Mining and Park 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 Park Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Park Hotels.
Diversification Opportunities for Lundin Mining and Park Hotels
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lundin and Park is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and Park Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Park 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 Park Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Park Hotels Resorts has no effect on the direction of Lundin Mining i.e., Lundin Mining and Park Hotels go up and down completely randomly.
Pair Corralation between Lundin Mining and Park Hotels
Assuming the 90 days trading horizon Lundin Mining is expected to generate 5.11 times less return on investment than Park Hotels. In addition to that, Lundin Mining is 1.46 times more volatile than Park Hotels Resorts. It trades about 0.0 of its total potential returns per unit of risk. Park Hotels Resorts is currently generating about 0.01 per unit of volatility. If you would invest 1,548 in Park Hotels Resorts on September 2, 2024 and sell it today you would earn a total of 12.00 from holding Park Hotels Resorts or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.23% |
| Values | Daily Returns |
Lundin Mining Corp vs. Park Hotels Resorts
Performance |
| Timeline |
| Lundin Mining Corp |
| Park Hotels Resorts |
Lundin Mining and Park Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and Park Hotels
The main advantage of trading using opposite Lundin Mining and Park Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, Park 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 Park Hotels will offset losses from the drop in Park Hotels' long position.| Lundin Mining vs. Supermarket Income REIT | Lundin Mining vs. Ecclesiastical Insurance Office | Lundin Mining vs. Batm Advanced Communications | Lundin Mining vs. Team Internet Group |
| Park Hotels vs. Uniper SE | Park Hotels vs. Mulberry Group PLC | Park Hotels vs. London Security Plc | Park Hotels vs. Triad Group PLC |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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