Correlation Between Lundin Mining and VF Corp
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and VF 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 VF 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 VF Corp, you can compare the effects of market volatilities on Lundin Mining and VF 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 VF Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and VF Corp.
Diversification Opportunities for Lundin Mining and VF Corp
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lundin and 0R30 is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and VF Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VF 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 VF Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VF Corp has no effect on the direction of Lundin Mining i.e., Lundin Mining and VF Corp go up and down completely randomly.
Pair Corralation between Lundin Mining and VF Corp
Assuming the 90 days trading horizon Lundin Mining Corp is expected to under-perform the VF Corp. But the stock apears to be less risky and, when comparing its historical volatility, Lundin Mining Corp is 1.23 times less risky than VF Corp. The stock trades about -0.34 of its potential returns per unit of risk. The VF Corp is currently generating about 0.5 of returns per unit of risk over similar time horizon. If you would invest 2,153 in VF Corp on November 5, 2024 and sell it today you would earn a total of 500.00 from holding VF Corp or generate 23.22% 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. VF Corp
Performance |
| Timeline |
| Lundin Mining Corp |
| VF Corp |
Lundin Mining and VF Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and VF Corp
The main advantage of trading using opposite Lundin Mining and VF Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, VF 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 VF Corp will offset losses from the drop in VF Corp's long position.| Lundin Mining vs. Samsung Electronics Co | Lundin Mining vs. Samsung Electronics Co | Lundin Mining vs. Toyota Motor Corp | Lundin Mining vs. Reliance Industries Ltd |
| VF Corp vs. Norwegian Air Shuttle | VF Corp vs. Lindsell Train Investment | VF Corp vs. United Airlines Holdings | VF Corp vs. Lowland Investment Co |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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