Correlation Between Lundin Mining and Ebro Foods
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and Ebro Foods 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 Ebro Foods 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 Ebro Foods, you can compare the effects of market volatilities on Lundin Mining and Ebro Foods 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 Ebro Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Ebro Foods.
Diversification Opportunities for Lundin Mining and Ebro Foods
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lundin and Ebro is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and Ebro Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ebro Foods 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 Ebro Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ebro Foods has no effect on the direction of Lundin Mining i.e., Lundin Mining and Ebro Foods go up and down completely randomly.
Pair Corralation between Lundin Mining and Ebro Foods
Assuming the 90 days trading horizon Lundin Mining Corp is expected to generate 3.32 times more return on investment than Ebro Foods. However, Lundin Mining is 3.32 times more volatile than Ebro Foods. It trades about 0.04 of its potential returns per unit of risk. Ebro Foods is currently generating about 0.02 per unit of risk. If you would invest 6,734 in Lundin Mining Corp on October 15, 2024 and sell it today you would earn a total of 3,101 from holding Lundin Mining Corp or generate 46.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Lundin Mining Corp vs. Ebro Foods
Performance |
| Timeline |
| Lundin Mining Corp |
| Ebro Foods |
Lundin Mining and Ebro Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and Ebro Foods
The main advantage of trading using opposite Lundin Mining and Ebro Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, Ebro Foods 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 Ebro Foods will offset losses from the drop in Ebro Foods' long position.| Lundin Mining vs. Taiwan Semiconductor Manufacturing | Lundin Mining vs. Impax Environmental Markets | Lundin Mining vs. Fidelity National Information | Lundin Mining vs. Automatic Data Processing |
| Ebro Foods vs. Edita Food Industries | Ebro Foods vs. Cornish Metals | Ebro Foods vs. European Metals Holdings | Ebro Foods vs. Jacquet Metal Service |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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