Correlation Between Aberdeen Diversified and Lundin Mining
Can any of the company-specific risk be diversified away by investing in both Aberdeen Diversified 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 Aberdeen Diversified and Lundin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberdeen Diversified Income and Lundin Mining Corp, you can compare the effects of market volatilities on Aberdeen Diversified 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 Aberdeen Diversified with a short position of Lundin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Diversified and Lundin Mining.
Diversification Opportunities for Aberdeen Diversified and Lundin Mining
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aberdeen and Lundin is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Diversified Income 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 Aberdeen Diversified 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 Aberdeen Diversified Income 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 Aberdeen Diversified i.e., Aberdeen Diversified and Lundin Mining go up and down completely randomly.
Pair Corralation between Aberdeen Diversified and Lundin Mining
Assuming the 90 days trading horizon Aberdeen Diversified Income is expected to generate 0.67 times more return on investment than Lundin Mining. However, Aberdeen Diversified Income is 1.49 times less risky than Lundin Mining. It trades about 0.02 of its potential returns per unit of risk. Lundin Mining Corp is currently generating about -0.03 per unit of risk. If you would invest 4,234 in Aberdeen Diversified Income on September 28, 2024 and sell it today you would earn a total of 106.00 from holding Aberdeen Diversified Income or generate 2.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen Diversified Income vs. Lundin Mining Corp
Performance |
| Timeline |
| Aberdeen Diversified |
| Lundin Mining Corp |
Aberdeen Diversified and Lundin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Diversified and Lundin Mining
The main advantage of trading using opposite Aberdeen Diversified and Lundin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Diversified 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.| Aberdeen Diversified vs. CATCo Reinsurance Opportunities | Aberdeen Diversified vs. BH Macro Limited | Aberdeen Diversified vs. Fair Oaks Income | Aberdeen Diversified vs. Legal General Group |
| Lundin Mining vs. Uniper SE | Lundin Mining vs. Mulberry Group PLC | Lundin Mining vs. London Security Plc | Lundin Mining vs. Triad Group PLC |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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