Correlation Between Lundin Mining and Evolution Gaming
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and Evolution Gaming 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 Evolution Gaming 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 Evolution Gaming Group, you can compare the effects of market volatilities on Lundin Mining and Evolution Gaming 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 Evolution Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Evolution Gaming.
Diversification Opportunities for Lundin Mining and Evolution Gaming
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lundin and Evolution is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and Evolution Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Gaming 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 Evolution Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Gaming has no effect on the direction of Lundin Mining i.e., Lundin Mining and Evolution Gaming go up and down completely randomly.
Pair Corralation between Lundin Mining and Evolution Gaming
Assuming the 90 days trading horizon Lundin Mining Corp is expected to generate 1.43 times more return on investment than Evolution Gaming. However, Lundin Mining is 1.43 times more volatile than Evolution Gaming Group. It trades about 0.05 of its potential returns per unit of risk. Evolution Gaming Group is currently generating about -0.04 per unit of risk. If you would invest 5,763 in Lundin Mining Corp on October 16, 2024 and sell it today you would earn a total of 3,805 from holding Lundin Mining Corp or generate 66.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lundin Mining Corp vs. Evolution Gaming Group
Performance |
| Timeline |
| Lundin Mining Corp |
| Evolution Gaming |
Lundin Mining and Evolution Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and Evolution Gaming
The main advantage of trading using opposite Lundin Mining and Evolution Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, Evolution Gaming 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 Evolution Gaming will offset losses from the drop in Evolution Gaming's 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 |
| Evolution Gaming vs. Sabre Insurance Group | Evolution Gaming vs. Norwegian Air Shuttle | Evolution Gaming vs. Sealed Air Corp | Evolution Gaming vs. Lundin Mining Corp |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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