Correlation Between Lundin Mining and IShares Physical
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and IShares Physical 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 IShares Physical 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 iShares Physical Silver, you can compare the effects of market volatilities on Lundin Mining and IShares Physical 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 IShares Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and IShares Physical.
Diversification Opportunities for Lundin Mining and IShares Physical
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lundin and IShares is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and iShares Physical Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Physical Silver 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 IShares Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Physical Silver has no effect on the direction of Lundin Mining i.e., Lundin Mining and IShares Physical go up and down completely randomly.
Pair Corralation between Lundin Mining and IShares Physical
Assuming the 90 days trading horizon Lundin Mining Corp is expected to generate 1.59 times more return on investment than IShares Physical. However, Lundin Mining is 1.59 times more volatile than iShares Physical Silver. It trades about 0.02 of its potential returns per unit of risk. iShares Physical Silver is currently generating about -0.3 per unit of risk. If you would invest 10,880 in Lundin Mining Corp on August 28, 2024 and sell it today you would earn a total of 70.00 from holding Lundin Mining Corp or generate 0.64% 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. iShares Physical Silver
Performance |
| Timeline |
| Lundin Mining Corp |
| iShares Physical Silver |
Lundin Mining and IShares Physical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and IShares Physical
The main advantage of trading using opposite Lundin Mining and IShares Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, IShares Physical 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 IShares Physical will offset losses from the drop in IShares Physical's 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 |
| IShares Physical vs. Neometals | IShares Physical vs. Coor Service Management | IShares Physical vs. Fidelity Sustainable USD | IShares Physical vs. Sancus Lending Group |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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