Correlation Between Lundin Mining and Gaming Realms
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and Gaming Realms 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 Gaming Realms 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 Gaming Realms plc, you can compare the effects of market volatilities on Lundin Mining and Gaming Realms 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 Gaming Realms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Gaming Realms.
Diversification Opportunities for Lundin Mining and Gaming Realms
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lundin and Gaming is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and Gaming Realms plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaming Realms 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 Gaming Realms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaming Realms plc has no effect on the direction of Lundin Mining i.e., Lundin Mining and Gaming Realms go up and down completely randomly.
Pair Corralation between Lundin Mining and Gaming Realms
Assuming the 90 days trading horizon Lundin Mining Corp is expected to generate 1.05 times more return on investment than Gaming Realms. However, Lundin Mining is 1.05 times more volatile than Gaming Realms plc. It trades about 0.09 of its potential returns per unit of risk. Gaming Realms plc is currently generating about 0.03 per unit of risk. If you would invest 6,735 in Lundin Mining Corp on August 25, 2024 and sell it today you would earn a total of 4,385 from holding Lundin Mining Corp or generate 65.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lundin Mining Corp vs. Gaming Realms plc
Performance |
| Timeline |
| Lundin Mining Corp |
| Gaming Realms plc |
Lundin Mining and Gaming Realms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and Gaming Realms
The main advantage of trading using opposite Lundin Mining and Gaming Realms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, Gaming Realms 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 Gaming Realms will offset losses from the drop in Gaming Realms' 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 |
| Gaming Realms vs. Samsung Electronics Co | Gaming Realms vs. Samsung Electronics Co | Gaming Realms vs. Toyota Motor Corp | Gaming Realms vs. Hon Hai Precision |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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