Correlation Between Lundin Mining and Golden Metal
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and Golden Metal 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 Golden Metal 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 Golden Metal Resources, you can compare the effects of market volatilities on Lundin Mining and Golden Metal 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 Golden Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Golden Metal.
Diversification Opportunities for Lundin Mining and Golden Metal
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lundin and Golden is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and Golden Metal Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Metal Resources 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 Golden Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Metal Resources has no effect on the direction of Lundin Mining i.e., Lundin Mining and Golden Metal go up and down completely randomly.
Pair Corralation between Lundin Mining and Golden Metal
Assuming the 90 days trading horizon Lundin Mining is expected to generate 30.28 times less return on investment than Golden Metal. But when comparing it to its historical volatility, Lundin Mining Corp is 18.46 times less risky than Golden Metal. It trades about 0.03 of its potential returns per unit of risk. Golden Metal Resources is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 9.00 in Golden Metal Resources on October 25, 2024 and sell it today you would earn a total of 3,241 from holding Golden Metal Resources or generate 36011.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 87.35% |
| Values | Daily Returns |
Lundin Mining Corp vs. Golden Metal Resources
Performance |
| Timeline |
| Lundin Mining Corp |
| Golden Metal Resources |
Lundin Mining and Golden Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and Golden Metal
The main advantage of trading using opposite Lundin Mining and Golden Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, Golden Metal 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 Golden Metal will offset losses from the drop in Golden Metal's long position.| Lundin Mining vs. Edita Food Industries | Lundin Mining vs. Baker Steel Resources | Lundin Mining vs. Grieg Seafood | Lundin Mining vs. Monster Beverage Corp |
| Golden Metal vs. Young Cos Brewery | Golden Metal vs. Sydbank | Golden Metal vs. Nordic Semiconductor ASA | Golden Metal vs. St Galler Kantonalbank |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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