Correlation Between Lundin Mining and Broadcom
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and Broadcom 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 Broadcom 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 Broadcom, you can compare the effects of market volatilities on Lundin Mining and Broadcom 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 Broadcom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Broadcom.
Diversification Opportunities for Lundin Mining and Broadcom
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lundin and Broadcom is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and Broadcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broadcom 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 Broadcom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broadcom has no effect on the direction of Lundin Mining i.e., Lundin Mining and Broadcom go up and down completely randomly.
Pair Corralation between Lundin Mining and Broadcom
Assuming the 90 days trading horizon Lundin Mining Corp is expected to under-perform the Broadcom. But the stock apears to be less risky and, when comparing its historical volatility, Lundin Mining Corp is 2.12 times less risky than Broadcom. The stock trades about -0.24 of its potential returns per unit of risk. The Broadcom is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 23,171 in Broadcom on November 8, 2024 and sell it today you would lose (177.00) from holding Broadcom or give up 0.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lundin Mining Corp vs. Broadcom
Performance |
| Timeline |
| Lundin Mining Corp |
| Broadcom |
Lundin Mining and Broadcom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and Broadcom
The main advantage of trading using opposite Lundin Mining and Broadcom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, Broadcom 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 Broadcom will offset losses from the drop in Broadcom's long position.| Lundin Mining vs. DXC Technology Co | Lundin Mining vs. Bytes Technology | Lundin Mining vs. Polar Capital Technology | Lundin Mining vs. Delta Air Lines |
| Broadcom vs. Ashtead Technology Holdings | Broadcom vs. Amedeo Air Four | Broadcom vs. Sartorius Stedim Biotech | Broadcom vs. Pentair 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |