Correlation Between Lundin Mining and Gerresheimer
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and Gerresheimer 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 Gerresheimer 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 Gerresheimer AG, you can compare the effects of market volatilities on Lundin Mining and Gerresheimer 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 Gerresheimer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Gerresheimer.
Diversification Opportunities for Lundin Mining and Gerresheimer
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lundin and Gerresheimer is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and Gerresheimer AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gerresheimer AG 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 Gerresheimer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gerresheimer AG has no effect on the direction of Lundin Mining i.e., Lundin Mining and Gerresheimer go up and down completely randomly.
Pair Corralation between Lundin Mining and Gerresheimer
Assuming the 90 days trading horizon Lundin Mining Corp is expected to generate 1.38 times more return on investment than Gerresheimer. However, Lundin Mining is 1.38 times more volatile than Gerresheimer AG. It trades about 0.05 of its potential returns per unit of risk. Gerresheimer AG is currently generating about -0.15 per unit of risk. If you would invest 10,536 in Lundin Mining Corp on September 3, 2024 and sell it today you would earn a total of 219.00 from holding Lundin Mining Corp or generate 2.08% 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. Gerresheimer AG
Performance |
| Timeline |
| Lundin Mining Corp |
| Gerresheimer AG |
Lundin Mining and Gerresheimer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and Gerresheimer
The main advantage of trading using opposite Lundin Mining and Gerresheimer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, Gerresheimer 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 Gerresheimer will offset losses from the drop in Gerresheimer's 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 |
| Gerresheimer vs. AfriTin Mining | Gerresheimer vs. Invesco Physical Silver | Gerresheimer vs. Lundin Mining Corp | Gerresheimer vs. Caledonia Mining |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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