Correlation Between Lundin Mining and FC Investment
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and FC 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 FC 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 FC Investment Trust, you can compare the effects of market volatilities on Lundin Mining and FC 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 FC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and FC Investment.
Diversification Opportunities for Lundin Mining and FC Investment
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lundin and FCIT is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and FC Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FC 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 FC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FC Investment Trust has no effect on the direction of Lundin Mining i.e., Lundin Mining and FC Investment go up and down completely randomly.
Pair Corralation between Lundin Mining and FC Investment
Assuming the 90 days trading horizon Lundin Mining Corp is expected to generate 3.17 times more return on investment than FC Investment. However, Lundin Mining is 3.17 times more volatile than FC Investment Trust. It trades about 0.06 of its potential returns per unit of risk. FC Investment Trust is currently generating about 0.06 per unit of risk. If you would invest 5,616 in Lundin Mining Corp on October 13, 2024 and sell it today you would earn a total of 4,219 from holding Lundin Mining Corp or generate 75.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Lundin Mining Corp vs. FC Investment Trust
Performance |
| Timeline |
| Lundin Mining Corp |
| FC Investment Trust |
Lundin Mining and FC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and FC Investment
The main advantage of trading using opposite Lundin Mining and FC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, FC 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 FC Investment will offset losses from the drop in FC Investment's long position.| Lundin Mining vs. DFS Furniture PLC | Lundin Mining vs. Gaztransport et Technigaz | Lundin Mining vs. American Homes 4 | Lundin Mining vs. International Consolidated Airlines |
| FC Investment vs. Ion Beam Applications | FC Investment vs. Lundin Mining Corp | FC Investment vs. Various Eateries PLC | FC Investment vs. GlobalData 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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