Correlation Between Lundin Mining and Blackrock World
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and Blackrock World 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 Blackrock World 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 Blackrock World Mining, you can compare the effects of market volatilities on Lundin Mining and Blackrock World 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 Blackrock World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Blackrock World.
Diversification Opportunities for Lundin Mining and Blackrock World
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lundin and Blackrock is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and Blackrock World Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock World 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 Blackrock World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock World Mining has no effect on the direction of Lundin Mining i.e., Lundin Mining and Blackrock World go up and down completely randomly.
Pair Corralation between Lundin Mining and Blackrock World
Assuming the 90 days trading horizon Lundin Mining Corp is expected to generate 1.72 times more return on investment than Blackrock World. However, Lundin Mining is 1.72 times more volatile than Blackrock World Mining. It trades about 0.02 of its potential returns per unit of risk. Blackrock World Mining is currently generating about -0.1 per unit of risk. If you would invest 10,880 in Lundin Mining Corp on August 28, 2024 and sell it today you would earn a total of 70.00 from holding Lundin Mining Corp or generate 0.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lundin Mining Corp vs. Blackrock World Mining
Performance |
| Timeline |
| Lundin Mining Corp |
| Blackrock World Mining |
Lundin Mining and Blackrock World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and Blackrock World
The main advantage of trading using opposite Lundin Mining and Blackrock World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, Blackrock World 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 Blackrock World will offset losses from the drop in Blackrock World'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 |
| Blackrock World vs. Catalyst Media Group | Blackrock World vs. Oncimmune Holdings plc | Blackrock World vs. Invesco Health Care | Blackrock World vs. Coor Service Management |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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