Correlation Between Lundin Mining and Guaranty Trust
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and Guaranty Trust 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 Guaranty Trust 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 Guaranty Trust Holding, you can compare the effects of market volatilities on Lundin Mining and Guaranty Trust 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 Guaranty Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Guaranty Trust.
Diversification Opportunities for Lundin Mining and Guaranty Trust
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lundin and Guaranty is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and Guaranty Trust Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guaranty Trust Holding 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 Guaranty Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guaranty Trust Holding has no effect on the direction of Lundin Mining i.e., Lundin Mining and Guaranty Trust go up and down completely randomly.
Pair Corralation between Lundin Mining and Guaranty Trust
Assuming the 90 days trading horizon Lundin Mining Corp is expected to generate 0.69 times more return on investment than Guaranty Trust. However, Lundin Mining Corp is 1.46 times less risky than Guaranty Trust. It trades about 0.03 of its potential returns per unit of risk. Guaranty Trust Holding is currently generating about 0.02 per unit of risk. If you would invest 7,309 in Lundin Mining Corp on November 3, 2024 and sell it today you would earn a total of 1,594 from holding Lundin Mining Corp or generate 21.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.56% |
| Values | Daily Returns |
Lundin Mining Corp vs. Guaranty Trust Holding
Performance |
| Timeline |
| Lundin Mining Corp |
| Guaranty Trust Holding |
Lundin Mining and Guaranty Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and Guaranty Trust
The main advantage of trading using opposite Lundin Mining and Guaranty Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, Guaranty Trust 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 Guaranty Trust will offset losses from the drop in Guaranty Trust's long position.| Lundin Mining vs. Bankers Investment Trust | Lundin Mining vs. Metro Bank PLC | Lundin Mining vs. Southwest Airlines Co | Lundin Mining vs. McEwen Mining |
| Guaranty Trust vs. Tyson Foods Cl | Guaranty Trust vs. Axfood AB | Guaranty Trust vs. Bell Food Group | Guaranty Trust vs. Austevoll Seafood ASA |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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