Correlation Between Lundin Mining and Trellus Health
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and Trellus Health 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 Trellus Health 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 Trellus Health plc, you can compare the effects of market volatilities on Lundin Mining and Trellus Health 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 Trellus Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Trellus Health.
Diversification Opportunities for Lundin Mining and Trellus Health
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lundin and Trellus is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and Trellus Health plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trellus Health 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 Trellus Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trellus Health plc has no effect on the direction of Lundin Mining i.e., Lundin Mining and Trellus Health go up and down completely randomly.
Pair Corralation between Lundin Mining and Trellus Health
Assuming the 90 days trading horizon Lundin Mining Corp is expected to generate 0.5 times more return on investment than Trellus Health. However, Lundin Mining Corp is 2.02 times less risky than Trellus Health. It trades about 0.04 of its potential returns per unit of risk. Trellus Health plc is currently generating about -0.08 per unit of risk. If you would invest 6,728 in Lundin Mining Corp on October 11, 2024 and sell it today you would earn a total of 2,977 from holding Lundin Mining Corp or generate 44.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Lundin Mining Corp vs. Trellus Health plc
Performance |
| Timeline |
| Lundin Mining Corp |
| Trellus Health plc |
Lundin Mining and Trellus Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and Trellus Health
The main advantage of trading using opposite Lundin Mining and Trellus Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, Trellus Health 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 Trellus Health will offset losses from the drop in Trellus Health's long position.| Lundin Mining vs. Impax Asset Management | Lundin Mining vs. Automatic Data Processing | Lundin Mining vs. Zoom Video Communications | Lundin Mining vs. Public Storage |
| Trellus Health vs. Hecla Mining Co | Trellus Health vs. Dalata Hotel Group | Trellus Health vs. National Beverage Corp | Trellus Health vs. Lundin Mining Corp |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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