Correlation Between Lundin Mining and Public Storage
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and Public Storage 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 Public Storage 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 Public Storage, you can compare the effects of market volatilities on Lundin Mining and Public Storage 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 Public Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Public Storage.
Diversification Opportunities for Lundin Mining and Public Storage
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lundin and Public is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and Public Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Storage 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 Public Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Storage has no effect on the direction of Lundin Mining i.e., Lundin Mining and Public Storage go up and down completely randomly.
Pair Corralation between Lundin Mining and Public Storage
Assuming the 90 days trading horizon Lundin Mining Corp is expected to generate 2.24 times more return on investment than Public Storage. However, Lundin Mining is 2.24 times more volatile than Public Storage. It trades about 0.01 of its potential returns per unit of risk. Public Storage is currently generating about -0.03 per unit of risk. If you would invest 9,393 in Lundin Mining Corp on October 29, 2024 and sell it today you would earn a total of 10.00 from holding Lundin Mining Corp or generate 0.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lundin Mining Corp vs. Public Storage
Performance |
| Timeline |
| Lundin Mining Corp |
| Public Storage |
Lundin Mining and Public Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and Public Storage
The main advantage of trading using opposite Lundin Mining and Public Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, Public Storage 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 Public Storage will offset losses from the drop in Public Storage'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 |
| Public Storage vs. Eastman Chemical Co | Public Storage vs. Fevertree Drinks Plc | Public Storage vs. International Biotechnology Trust | Public Storage vs. Monster Beverage 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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