Correlation Between Lundin Mining and K3 Business
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and K3 Business 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 K3 Business 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 K3 Business Technology, you can compare the effects of market volatilities on Lundin Mining and K3 Business 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 K3 Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and K3 Business.
Diversification Opportunities for Lundin Mining and K3 Business
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lundin and KBT is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and K3 Business Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K3 Business Technology 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 K3 Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K3 Business Technology has no effect on the direction of Lundin Mining i.e., Lundin Mining and K3 Business go up and down completely randomly.
Pair Corralation between Lundin Mining and K3 Business
Assuming the 90 days trading horizon Lundin Mining Corp is expected to generate 1.77 times more return on investment than K3 Business. However, Lundin Mining is 1.77 times more volatile than K3 Business Technology. It trades about -0.03 of its potential returns per unit of risk. K3 Business Technology is currently generating about -0.22 per unit of risk. If you would invest 12,136 in Lundin Mining Corp on August 30, 2024 and sell it today you would lose (1,556) from holding Lundin Mining Corp or give up 12.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lundin Mining Corp vs. K3 Business Technology
Performance |
| Timeline |
| Lundin Mining Corp |
| K3 Business Technology |
Lundin Mining and K3 Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and K3 Business
The main advantage of trading using opposite Lundin Mining and K3 Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, K3 Business 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 K3 Business will offset losses from the drop in K3 Business' long position.| Lundin Mining vs. Tungsten West PLC | Lundin Mining vs. Argo Group Limited | Lundin Mining vs. Hardide PLC | Lundin Mining vs. Versarien PLC |
| K3 Business vs. Tlou Energy | K3 Business vs. Rockfire Resources plc | K3 Business vs. Ikigai Ventures | K3 Business vs. Falcon Oil Gas |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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