Correlation Between Lundin Mining and Panasonic Corp
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and Panasonic Corp 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 Panasonic Corp 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 Panasonic Corp, you can compare the effects of market volatilities on Lundin Mining and Panasonic Corp 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 Panasonic Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Panasonic Corp.
Diversification Opportunities for Lundin Mining and Panasonic Corp
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lundin and Panasonic is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and Panasonic Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panasonic Corp 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 Panasonic Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panasonic Corp has no effect on the direction of Lundin Mining i.e., Lundin Mining and Panasonic Corp go up and down completely randomly.
Pair Corralation between Lundin Mining and Panasonic Corp
Assuming the 90 days trading horizon Lundin Mining is expected to generate 1.02 times less return on investment than Panasonic Corp. In addition to that, Lundin Mining is 1.26 times more volatile than Panasonic Corp. It trades about 0.04 of its total potential returns per unit of risk. Panasonic Corp is currently generating about 0.05 per unit of volatility. If you would invest 110,727 in Panasonic Corp on October 16, 2024 and sell it today you would earn a total of 46,473 from holding Panasonic Corp or generate 41.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 86.97% |
| Values | Daily Returns |
Lundin Mining Corp vs. Panasonic Corp
Performance |
| Timeline |
| Lundin Mining Corp |
| Panasonic Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Lundin Mining and Panasonic Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and Panasonic Corp
The main advantage of trading using opposite Lundin Mining and Panasonic Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, Panasonic Corp 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 Panasonic Corp will offset losses from the drop in Panasonic Corp's long position.| Lundin Mining vs. Walmart | Lundin Mining vs. BYD Co | Lundin Mining vs. Volkswagen AG | Lundin Mining vs. Volkswagen AG Non Vtg |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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