Correlation Between Lundin Mining and Poxel SA
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and Poxel SA 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 Poxel SA 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 Poxel SA, you can compare the effects of market volatilities on Lundin Mining and Poxel SA 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 Poxel SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Poxel SA.
Diversification Opportunities for Lundin Mining and Poxel SA
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lundin and Poxel is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and Poxel SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Poxel SA 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 Poxel SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Poxel SA has no effect on the direction of Lundin Mining i.e., Lundin Mining and Poxel SA go up and down completely randomly.
Pair Corralation between Lundin Mining and Poxel SA
Assuming the 90 days trading horizon Lundin Mining Corp is expected to generate 0.3 times more return on investment than Poxel SA. However, Lundin Mining Corp is 3.33 times less risky than Poxel SA. It trades about -0.04 of its potential returns per unit of risk. Poxel SA is currently generating about -0.44 per unit of risk. If you would invest 10,585 in Lundin Mining Corp on September 12, 2024 and sell it today you would lose (235.00) from holding Lundin Mining Corp or give up 2.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lundin Mining Corp vs. Poxel SA
Performance |
| Timeline |
| Lundin Mining Corp |
| Poxel SA |
Lundin Mining and Poxel SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and Poxel SA
The main advantage of trading using opposite Lundin Mining and Poxel SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, Poxel SA 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 Poxel SA will offset losses from the drop in Poxel SA's long position.| Lundin Mining vs. Hong Kong Land | Lundin Mining vs. Neometals | Lundin Mining vs. Coor Service Management | Lundin Mining vs. Fidelity Sustainable USD |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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