Correlation Between Lundin Mining and LBG Media
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and LBG Media 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 LBG Media 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 LBG Media PLC, you can compare the effects of market volatilities on Lundin Mining and LBG Media 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 LBG Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and LBG Media.
Diversification Opportunities for Lundin Mining and LBG Media
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lundin and LBG is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and LBG Media PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LBG Media 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 LBG Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LBG Media PLC has no effect on the direction of Lundin Mining i.e., Lundin Mining and LBG Media go up and down completely randomly.
Pair Corralation between Lundin Mining and LBG Media
Assuming the 90 days trading horizon Lundin Mining Corp is expected to under-perform the LBG Media. In addition to that, Lundin Mining is 1.21 times more volatile than LBG Media PLC. It trades about -0.38 of its total potential returns per unit of risk. LBG Media PLC is currently generating about -0.07 per unit of volatility. If you would invest 12,700 in LBG Media PLC on November 6, 2024 and sell it today you would lose (300.00) from holding LBG Media PLC or give up 2.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lundin Mining Corp vs. LBG Media PLC
Performance |
| Timeline |
| Lundin Mining Corp |
| LBG Media PLC |
Lundin Mining and LBG Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and LBG Media
The main advantage of trading using opposite Lundin Mining and LBG Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, LBG Media 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 LBG Media will offset losses from the drop in LBG Media's long position.| Lundin Mining vs. United Airlines Holdings | Lundin Mining vs. Jacquet Metal Service | Lundin Mining vs. Cardinal Health | Lundin Mining vs. Coeur Mining |
| LBG Media vs. Playtech Plc | LBG Media vs. International Biotechnology Trust | LBG Media vs. Travel Leisure Co | LBG Media vs. Southwest Airlines Co |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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