Correlation Between Lundin Mining and Pentair PLC
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and Pentair PLC 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 Pentair PLC 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 Pentair PLC, you can compare the effects of market volatilities on Lundin Mining and Pentair PLC 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 Pentair PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Pentair PLC.
Diversification Opportunities for Lundin Mining and Pentair PLC
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lundin and Pentair is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and Pentair PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pentair PLC 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 Pentair PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pentair PLC has no effect on the direction of Lundin Mining i.e., Lundin Mining and Pentair PLC go up and down completely randomly.
Pair Corralation between Lundin Mining and Pentair PLC
Assuming the 90 days trading horizon Lundin Mining Corp is expected to under-perform the Pentair PLC. In addition to that, Lundin Mining is 2.01 times more volatile than Pentair PLC. It trades about -0.09 of its total potential returns per unit of risk. Pentair PLC is currently generating about 0.06 per unit of volatility. If you would invest 9,870 in Pentair PLC on November 1, 2024 and sell it today you would earn a total of 340.00 from holding Pentair PLC or generate 3.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.08% |
| Values | Daily Returns |
Lundin Mining Corp vs. Pentair PLC
Performance |
| Timeline |
| Lundin Mining Corp |
| Pentair PLC |
Lundin Mining and Pentair PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and Pentair PLC
The main advantage of trading using opposite Lundin Mining and Pentair PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, Pentair PLC 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 Pentair PLC will offset losses from the drop in Pentair PLC's long position.| Lundin Mining vs. Gaming Realms plc | Lundin Mining vs. Impax Asset Management | Lundin Mining vs. Creo Medical Group | Lundin Mining vs. Games Workshop Group |
| Pentair PLC vs. Tatton Asset Management | Pentair PLC vs. Coor Service Management | Pentair PLC vs. Roper Technologies | Pentair PLC vs. Eneraqua Technologies PLC |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |