Correlation Between Lundin Mining and CAP LEASE
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and CAP LEASE 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 CAP LEASE 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 CAP LEASE AVIATION, you can compare the effects of market volatilities on Lundin Mining and CAP LEASE 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 CAP LEASE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and CAP LEASE.
Diversification Opportunities for Lundin Mining and CAP LEASE
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lundin and CAP is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and CAP LEASE AVIATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAP LEASE AVIATION 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 CAP LEASE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAP LEASE AVIATION has no effect on the direction of Lundin Mining i.e., Lundin Mining and CAP LEASE go up and down completely randomly.
Pair Corralation between Lundin Mining and CAP LEASE
Assuming the 90 days trading horizon Lundin Mining Corp is expected to generate 0.83 times more return on investment than CAP LEASE. However, Lundin Mining Corp is 1.21 times less risky than CAP LEASE. It trades about 0.04 of its potential returns per unit of risk. CAP LEASE AVIATION is currently generating about -0.03 per unit of risk. If you would invest 6,728 in Lundin Mining Corp on October 11, 2024 and sell it today you would earn a total of 2,977 from holding Lundin Mining Corp or generate 44.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.79% |
| Values | Daily Returns |
Lundin Mining Corp vs. CAP LEASE AVIATION
Performance |
| Timeline |
| Lundin Mining Corp |
| CAP LEASE AVIATION |
Lundin Mining and CAP LEASE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and CAP LEASE
The main advantage of trading using opposite Lundin Mining and CAP LEASE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, CAP LEASE 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 CAP LEASE will offset losses from the drop in CAP LEASE's long position.| Lundin Mining vs. Impax Asset Management | Lundin Mining vs. Automatic Data Processing | Lundin Mining vs. Zoom Video Communications | Lundin Mining vs. Public Storage |
| CAP LEASE vs. Allianz Technology Trust | CAP LEASE vs. Lundin Mining Corp | CAP LEASE vs. Learning Technologies Group | CAP LEASE vs. Celebrus Technologies 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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