Correlation Between Lundin Mining and Roper Technologies
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and Roper Technologies 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 Roper Technologies 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 Roper Technologies, you can compare the effects of market volatilities on Lundin Mining and Roper Technologies 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 Roper Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Roper Technologies.
Diversification Opportunities for Lundin Mining and Roper Technologies
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lundin and Roper is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and Roper Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roper Technologies 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 Roper Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roper Technologies has no effect on the direction of Lundin Mining i.e., Lundin Mining and Roper Technologies go up and down completely randomly.
Pair Corralation between Lundin Mining and Roper Technologies
Assuming the 90 days trading horizon Lundin Mining is expected to generate 1.92 times less return on investment than Roper Technologies. In addition to that, Lundin Mining is 1.81 times more volatile than Roper Technologies. It trades about 0.05 of its total potential returns per unit of risk. Roper Technologies is currently generating about 0.19 per unit of volatility. If you would invest 54,110 in Roper Technologies on September 3, 2024 and sell it today you would earn a total of 2,653 from holding Roper Technologies or generate 4.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lundin Mining Corp vs. Roper Technologies
Performance |
| Timeline |
| Lundin Mining Corp |
| Roper Technologies |
Lundin Mining and Roper Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and Roper Technologies
The main advantage of trading using opposite Lundin Mining and Roper Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, Roper Technologies 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 Roper Technologies will offset losses from the drop in Roper Technologies' long position.| Lundin Mining vs. CVS Health Corp | Lundin Mining vs. Optima Health plc | Lundin Mining vs. Primary Health Properties | Lundin Mining vs. Worldwide Healthcare Trust |
| Roper Technologies vs. Hochschild Mining plc | Roper Technologies vs. Lundin Mining Corp | Roper Technologies vs. Ebro Foods | Roper Technologies vs. Silvercorp Metals |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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