Correlation Between Lundin Mining and GoldMining
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and GoldMining 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 GoldMining 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 GoldMining, you can compare the effects of market volatilities on Lundin Mining and GoldMining 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 GoldMining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and GoldMining.
Diversification Opportunities for Lundin Mining and GoldMining
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lundin and GoldMining is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and GoldMining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoldMining 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 GoldMining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoldMining has no effect on the direction of Lundin Mining i.e., Lundin Mining and GoldMining go up and down completely randomly.
Pair Corralation between Lundin Mining and GoldMining
Assuming the 90 days trading horizon Lundin Mining is expected to generate 1.83 times less return on investment than GoldMining. But when comparing it to its historical volatility, Lundin Mining Corp is 1.17 times less risky than GoldMining. It trades about 0.02 of its potential returns per unit of risk. GoldMining is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 108.00 in GoldMining on November 3, 2024 and sell it today you would earn a total of 10.00 from holding GoldMining or generate 9.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 50.0% |
| Values | Daily Returns |
Lundin Mining Corp vs. GoldMining
Performance |
| Timeline |
| Lundin Mining Corp |
| GoldMining |
Lundin Mining and GoldMining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and GoldMining
The main advantage of trading using opposite Lundin Mining and GoldMining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, GoldMining 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 GoldMining will offset losses from the drop in GoldMining's long position.| Lundin Mining vs. Bankers Investment Trust | Lundin Mining vs. Metro Bank PLC | Lundin Mining vs. Southwest Airlines Co | Lundin Mining vs. McEwen Mining |
| GoldMining vs. Summit Materials Cl | GoldMining vs. First Majestic Silver | GoldMining vs. Qurate Retail Series | GoldMining 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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