Correlation Between Lundin Mining and Beowulf Mining
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and Beowulf Mining 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 Beowulf Mining 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 Beowulf Mining, you can compare the effects of market volatilities on Lundin Mining and Beowulf Mining 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 Beowulf Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Beowulf Mining.
Diversification Opportunities for Lundin Mining and Beowulf Mining
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lundin and Beowulf is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and Beowulf Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beowulf Mining 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 Beowulf Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beowulf Mining has no effect on the direction of Lundin Mining i.e., Lundin Mining and Beowulf Mining go up and down completely randomly.
Pair Corralation between Lundin Mining and Beowulf Mining
Assuming the 90 days trading horizon Lundin Mining Corp is expected to generate 0.65 times more return on investment than Beowulf Mining. However, Lundin Mining Corp is 1.54 times less risky than Beowulf Mining. It trades about -0.02 of its potential returns per unit of risk. Beowulf Mining is currently generating about -0.1 per unit of risk. If you would invest 12,255 in Lundin Mining Corp on August 28, 2024 and sell it today you would lose (1,305) from holding Lundin Mining Corp or give up 10.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
Lundin Mining Corp vs. Beowulf Mining
Performance |
| Timeline |
| Lundin Mining Corp |
| Beowulf Mining |
Lundin Mining and Beowulf Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and Beowulf Mining
The main advantage of trading using opposite Lundin Mining and Beowulf Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, Beowulf Mining 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 Beowulf Mining will offset losses from the drop in Beowulf Mining's long position.| Lundin Mining vs. Playtech Plc | Lundin Mining vs. Naturhouse Health SA | Lundin Mining vs. Cardinal Health | Lundin Mining vs. Naked Wines plc |
| Beowulf Mining vs. Iron Mountain | Beowulf Mining vs. Zanaga Iron Ore | Beowulf Mining vs. Lords Grp Trading | Beowulf Mining vs. Kinnevik Investment AB |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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