Correlation Between Lundin Mining and Inspiration Healthcare
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and Inspiration Healthcare 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 Inspiration Healthcare 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 Inspiration Healthcare Group, you can compare the effects of market volatilities on Lundin Mining and Inspiration Healthcare 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 Inspiration Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Inspiration Healthcare.
Diversification Opportunities for Lundin Mining and Inspiration Healthcare
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lundin and Inspiration is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and Inspiration Healthcare Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inspiration Healthcare 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 Inspiration Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inspiration Healthcare has no effect on the direction of Lundin Mining i.e., Lundin Mining and Inspiration Healthcare go up and down completely randomly.
Pair Corralation between Lundin Mining and Inspiration Healthcare
Assuming the 90 days trading horizon Lundin Mining Corp is expected to generate 3.51 times more return on investment than Inspiration Healthcare. However, Lundin Mining is 3.51 times more volatile than Inspiration Healthcare Group. It trades about 0.07 of its potential returns per unit of risk. Inspiration Healthcare Group is currently generating about 0.06 per unit of risk. If you would invest 9,298 in Lundin Mining Corp on October 20, 2024 and sell it today you would earn a total of 270.00 from holding Lundin Mining Corp or generate 2.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lundin Mining Corp vs. Inspiration Healthcare Group
Performance |
| Timeline |
| Lundin Mining Corp |
| Inspiration Healthcare |
Lundin Mining and Inspiration Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and Inspiration Healthcare
The main advantage of trading using opposite Lundin Mining and Inspiration Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, Inspiration Healthcare 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 Inspiration Healthcare will offset losses from the drop in Inspiration Healthcare's long position.| Lundin Mining vs. Zegona Communications Plc | Lundin Mining vs. Zoom Video Communications | Lundin Mining vs. International Consolidated Airlines | Lundin Mining vs. Charter Communications Cl |
| Inspiration Healthcare vs. Centene Corp | Inspiration Healthcare vs. Viridian Therapeutics | Inspiration Healthcare vs. CVR Energy | Inspiration Healthcare vs. Nationwide Building Society |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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