Correlation Between Lundin Mining and Compagnie Plastic
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and Compagnie Plastic 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 Compagnie Plastic 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 Compagnie Plastic Omnium, you can compare the effects of market volatilities on Lundin Mining and Compagnie Plastic 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 Compagnie Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Compagnie Plastic.
Diversification Opportunities for Lundin Mining and Compagnie Plastic
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lundin and Compagnie is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and Compagnie Plastic Omnium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Plastic Omnium 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 Compagnie Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Plastic Omnium has no effect on the direction of Lundin Mining i.e., Lundin Mining and Compagnie Plastic go up and down completely randomly.
Pair Corralation between Lundin Mining and Compagnie Plastic
Assuming the 90 days trading horizon Lundin Mining Corp is expected to under-perform the Compagnie Plastic. But the stock apears to be less risky and, when comparing its historical volatility, Lundin Mining Corp is 1.15 times less risky than Compagnie Plastic. The stock trades about -0.21 of its potential returns per unit of risk. The Compagnie Plastic Omnium is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,062 in Compagnie Plastic Omnium on November 7, 2024 and sell it today you would lose (16.00) from holding Compagnie Plastic Omnium or give up 1.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lundin Mining Corp vs. Compagnie Plastic Omnium
Performance |
| Timeline |
| Lundin Mining Corp |
| Compagnie Plastic Omnium |
Lundin Mining and Compagnie Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and Compagnie Plastic
The main advantage of trading using opposite Lundin Mining and Compagnie Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, Compagnie Plastic 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 Compagnie Plastic will offset losses from the drop in Compagnie Plastic's long position.| Lundin Mining vs. United Airlines Holdings | Lundin Mining vs. Jacquet Metal Service | Lundin Mining vs. Cardinal Health | Lundin Mining vs. Coeur Mining |
| Compagnie Plastic vs. Cornish Metals | Compagnie Plastic vs. Tatton Asset Management | Compagnie Plastic vs. URU Metals | Compagnie Plastic vs. Fulcrum Metals 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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