Correlation Between Lundin Mining and Aurora Investment
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and Aurora Investment 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 Aurora Investment 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 Aurora Investment Trust, you can compare the effects of market volatilities on Lundin Mining and Aurora Investment 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 Aurora Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Aurora Investment.
Diversification Opportunities for Lundin Mining and Aurora Investment
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lundin and Aurora is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and Aurora Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Investment Trust 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 Aurora Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Investment Trust has no effect on the direction of Lundin Mining i.e., Lundin Mining and Aurora Investment go up and down completely randomly.
Pair Corralation between Lundin Mining and Aurora Investment
Assuming the 90 days trading horizon Lundin Mining Corp is expected to generate 2.41 times more return on investment than Aurora Investment. However, Lundin Mining is 2.41 times more volatile than Aurora Investment Trust. It trades about 0.05 of its potential returns per unit of risk. Aurora Investment Trust is currently generating about 0.04 per unit of risk. If you would invest 7,669 in Lundin Mining Corp on September 4, 2024 and sell it today you would earn a total of 3,131 from holding Lundin Mining Corp or generate 40.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Lundin Mining Corp vs. Aurora Investment Trust
Performance |
| Timeline |
| Lundin Mining Corp |
| Aurora Investment Trust |
Lundin Mining and Aurora Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and Aurora Investment
The main advantage of trading using opposite Lundin Mining and Aurora Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, Aurora Investment 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 Aurora Investment will offset losses from the drop in Aurora Investment's long position.| Lundin Mining vs. Samsung Electronics Co | Lundin Mining vs. Samsung Electronics Co | Lundin Mining vs. Hyundai Motor | Lundin Mining vs. Toyota Motor Corp |
| Aurora Investment vs. SupplyMe Capital PLC | Aurora Investment vs. Lloyds Banking Group | Aurora Investment vs. Premier African Minerals | Aurora Investment vs. SANTANDER UK 8 |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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