Correlation Between Lundin Mining and Macfarlane Group
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and Macfarlane Group 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 Macfarlane Group 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 Macfarlane Group PLC, you can compare the effects of market volatilities on Lundin Mining and Macfarlane Group 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 Macfarlane Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Macfarlane Group.
Diversification Opportunities for Lundin Mining and Macfarlane Group
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lundin and Macfarlane is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and Macfarlane Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macfarlane Group 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 Macfarlane Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macfarlane Group PLC has no effect on the direction of Lundin Mining i.e., Lundin Mining and Macfarlane Group go up and down completely randomly.
Pair Corralation between Lundin Mining and Macfarlane Group
Assuming the 90 days trading horizon Lundin Mining Corp is expected to generate 1.72 times more return on investment than Macfarlane Group. However, Lundin Mining is 1.72 times more volatile than Macfarlane Group PLC. It trades about 0.06 of its potential returns per unit of risk. Macfarlane Group PLC is currently generating about -0.26 per unit of risk. If you would invest 10,536 in Lundin Mining Corp on September 4, 2024 and sell it today you would earn a total of 264.00 from holding Lundin Mining Corp or generate 2.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lundin Mining Corp vs. Macfarlane Group PLC
Performance |
| Timeline |
| Lundin Mining Corp |
| Macfarlane Group PLC |
Lundin Mining and Macfarlane Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and Macfarlane Group
The main advantage of trading using opposite Lundin Mining and Macfarlane Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, Macfarlane Group 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 Macfarlane Group will offset losses from the drop in Macfarlane Group'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 |
| Macfarlane Group vs. Chocoladefabriken Lindt Spruengli | Macfarlane Group vs. National Atomic Co | Macfarlane Group vs. OTP Bank Nyrt | Macfarlane Group vs. Samsung Electronics 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 CEOs Directory module to screen CEOs from public companies around the world.
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