Correlation Between Lundin Mining and Kinnevik Investment
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and Kinnevik Investment 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 Kinnevik Investment 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 Kinnevik Investment AB, you can compare the effects of market volatilities on Lundin Mining and Kinnevik Investment 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 Kinnevik Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Kinnevik Investment.
Diversification Opportunities for Lundin Mining and Kinnevik Investment
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lundin and Kinnevik is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and Kinnevik Investment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinnevik Investment 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 Kinnevik Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinnevik Investment has no effect on the direction of Lundin Mining i.e., Lundin Mining and Kinnevik Investment go up and down completely randomly.
Pair Corralation between Lundin Mining and Kinnevik Investment
Assuming the 90 days trading horizon Lundin Mining Corp is expected to generate 1.1 times more return on investment than Kinnevik Investment. However, Lundin Mining is 1.1 times more volatile than Kinnevik Investment AB. It trades about 0.06 of its potential returns per unit of risk. Kinnevik Investment AB is currently generating about -0.02 per unit of risk. If you would invest 7,060 in Lundin Mining Corp on September 14, 2024 and sell it today you would earn a total of 2,868 from holding Lundin Mining Corp or generate 40.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.91% |
| Values | Daily Returns |
Lundin Mining Corp vs. Kinnevik Investment AB
Performance |
| Timeline |
| Lundin Mining Corp |
| Kinnevik Investment |
Lundin Mining and Kinnevik Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and Kinnevik Investment
The main advantage of trading using opposite Lundin Mining and Kinnevik Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, Kinnevik Investment 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 Kinnevik Investment will offset losses from the drop in Kinnevik Investment's long position.| Lundin Mining vs. Gear4music Plc | Lundin Mining vs. Fidelity National Information | Lundin Mining vs. Teradata Corp | Lundin Mining vs. Public Storage |
| Kinnevik Investment vs. Caledonia Mining | Kinnevik Investment vs. Lundin Mining Corp | Kinnevik Investment vs. Coeur Mining | Kinnevik Investment vs. Universal Music Group |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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