Correlation Between Albion Technology and Lundin Mining
Can any of the company-specific risk be diversified away by investing in both Albion Technology 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 Albion Technology and Lundin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Albion Technology General and Lundin Mining Corp, you can compare the effects of market volatilities on Albion Technology 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 Albion Technology with a short position of Lundin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albion Technology and Lundin Mining.
Diversification Opportunities for Albion Technology and Lundin Mining
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Albion and Lundin is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Albion Technology General 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 Albion Technology 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 Albion Technology General 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 Albion Technology i.e., Albion Technology and Lundin Mining go up and down completely randomly.
Pair Corralation between Albion Technology and Lundin Mining
Assuming the 90 days trading horizon Albion Technology General is expected to under-perform the Lundin Mining. But the stock apears to be less risky and, when comparing its historical volatility, Albion Technology General is 1.97 times less risky than Lundin Mining. The stock trades about -0.04 of its potential returns per unit of risk. The Lundin Mining Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 10,880 in Lundin Mining Corp on August 29, 2024 and sell it today you would lose (20.00) from holding Lundin Mining Corp or give up 0.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Albion Technology General vs. Lundin Mining Corp
Performance |
| Timeline |
| Albion Technology General |
| Lundin Mining Corp |
Albion Technology and Lundin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Albion Technology and Lundin Mining
The main advantage of trading using opposite Albion Technology and Lundin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albion Technology 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.| Albion Technology vs. Toyota Motor Corp | Albion Technology vs. Lendinvest PLC | Albion Technology vs. Neometals | Albion Technology vs. Coor Service Management |
| Lundin Mining vs. Lendinvest PLC | Lundin Mining vs. Neometals | Lundin Mining vs. Coor Service Management | Lundin Mining vs. Albion Technology General |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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