Correlation Between Lundin Mining and Gamma Communications
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and Gamma Communications 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 Gamma Communications 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 Gamma Communications PLC, you can compare the effects of market volatilities on Lundin Mining and Gamma Communications 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 Gamma Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Gamma Communications.
Diversification Opportunities for Lundin Mining and Gamma Communications
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lundin and Gamma is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and Gamma Communications PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamma Communications PLC 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 Gamma Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamma Communications PLC has no effect on the direction of Lundin Mining i.e., Lundin Mining and Gamma Communications go up and down completely randomly.
Pair Corralation between Lundin Mining and Gamma Communications
Assuming the 90 days trading horizon Lundin Mining Corp is expected to generate 1.79 times more return on investment than Gamma Communications. However, Lundin Mining is 1.79 times more volatile than Gamma Communications PLC. It trades about 0.06 of its potential returns per unit of risk. Gamma Communications PLC is currently generating about 0.07 per unit of risk. If you would invest 6,115 in Lundin Mining Corp on September 3, 2024 and sell it today you would earn a total of 4,640 from holding Lundin Mining Corp or generate 75.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Lundin Mining Corp vs. Gamma Communications PLC
Performance |
| Timeline |
| Lundin Mining Corp |
| Gamma Communications PLC |
Lundin Mining and Gamma Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and Gamma Communications
The main advantage of trading using opposite Lundin Mining and Gamma Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, Gamma Communications 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 Gamma Communications will offset losses from the drop in Gamma Communications' long position.| Lundin Mining vs. CVS Health Corp | Lundin Mining vs. Optima Health plc | Lundin Mining vs. Primary Health Properties | Lundin Mining vs. Worldwide Healthcare Trust |
| Gamma Communications vs. Jacquet Metal Service | Gamma Communications vs. GreenX Metals | Gamma Communications vs. Fevertree Drinks Plc | Gamma Communications vs. Wheaton Precious Metals |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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