Correlation Between Lundin Mining and Antofagasta PLC
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and Antofagasta 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 Antofagasta 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 Antofagasta PLC, you can compare the effects of market volatilities on Lundin Mining and Antofagasta 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 Antofagasta PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Antofagasta PLC.
Diversification Opportunities for Lundin Mining and Antofagasta PLC
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lundin and Antofagasta is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and Antofagasta PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antofagasta 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 Antofagasta PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antofagasta PLC has no effect on the direction of Lundin Mining i.e., Lundin Mining and Antofagasta PLC go up and down completely randomly.
Pair Corralation between Lundin Mining and Antofagasta PLC
Assuming the 90 days trading horizon Lundin Mining Corp is expected to under-perform the Antofagasta PLC. In addition to that, Lundin Mining is 1.17 times more volatile than Antofagasta PLC. It trades about -0.01 of its total potential returns per unit of risk. Antofagasta PLC is currently generating about 0.17 per unit of volatility. If you would invest 165,650 in Antofagasta PLC on September 12, 2024 and sell it today you would earn a total of 9,600 from holding Antofagasta PLC or generate 5.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lundin Mining Corp vs. Antofagasta PLC
Performance |
| Timeline |
| Lundin Mining Corp |
| Antofagasta PLC |
Lundin Mining and Antofagasta PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and Antofagasta PLC
The main advantage of trading using opposite Lundin Mining and Antofagasta PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, Antofagasta 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 Antofagasta PLC will offset losses from the drop in Antofagasta PLC's long position.| Lundin Mining vs. Hong Kong Land | Lundin Mining vs. Neometals | Lundin Mining vs. Coor Service Management | Lundin Mining vs. Fidelity Sustainable USD |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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