Correlation Between GoldMining and Lundin Mining
Can any of the company-specific risk be diversified away by investing in both GoldMining and Lundin Mining 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 GoldMining and Lundin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoldMining and Lundin Mining Corp, you can compare the effects of market volatilities on GoldMining and Lundin Mining 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 GoldMining with a short position of Lundin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoldMining and Lundin Mining.
Diversification Opportunities for GoldMining and Lundin Mining
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GoldMining and Lundin is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding GoldMining and Lundin Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Mining Corp and GoldMining 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 GoldMining are associated (or correlated) with Lundin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lundin Mining Corp has no effect on the direction of GoldMining i.e., GoldMining and Lundin Mining go up and down completely randomly.
Pair Corralation between GoldMining and Lundin Mining
Assuming the 90 days trading horizon GoldMining is expected to under-perform the Lundin Mining. In addition to that, GoldMining is 1.6 times more volatile than Lundin Mining Corp. It trades about -0.03 of its total potential returns per unit of risk. Lundin Mining Corp is currently generating about 0.06 per unit of volatility. If you would invest 5,892 in Lundin Mining Corp on August 28, 2024 and sell it today you would earn a total of 5,058 from holding Lundin Mining Corp or generate 85.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 35.34% |
| Values | Daily Returns |
GoldMining vs. Lundin Mining Corp
Performance |
| Timeline |
| GoldMining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Lundin Mining Corp |
GoldMining and Lundin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoldMining and Lundin Mining
The main advantage of trading using opposite GoldMining and Lundin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoldMining position performs unexpectedly, Lundin Mining 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 Lundin Mining will offset losses from the drop in Lundin Mining's long position.| GoldMining vs. Samsung Electronics Co | GoldMining vs. Samsung Electronics Co | GoldMining vs. Hyundai Motor | GoldMining vs. Toyota Motor Corp |
| Lundin Mining vs. Samsung Electronics Co | Lundin Mining vs. Samsung Electronics Co | Lundin Mining vs. Hyundai Motor | Lundin Mining vs. Toyota Motor 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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