Correlation Between Aeorema Communications and Lundin Mining
Can any of the company-specific risk be diversified away by investing in both Aeorema Communications 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 Aeorema Communications and Lundin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeorema Communications Plc and Lundin Mining Corp, you can compare the effects of market volatilities on Aeorema Communications 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 Aeorema Communications with a short position of Lundin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeorema Communications and Lundin Mining.
Diversification Opportunities for Aeorema Communications and Lundin Mining
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aeorema and Lundin is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Aeorema Communications Plc 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 Aeorema Communications 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 Aeorema Communications Plc 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 Aeorema Communications i.e., Aeorema Communications and Lundin Mining go up and down completely randomly.
Pair Corralation between Aeorema Communications and Lundin Mining
Assuming the 90 days trading horizon Aeorema Communications Plc is expected to under-perform the Lundin Mining. But the stock apears to be less risky and, when comparing its historical volatility, Aeorema Communications Plc is 1.08 times less risky than Lundin Mining. The stock trades about -0.02 of its potential returns per unit of risk. The Lundin Mining Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 7,998 in Lundin Mining Corp on August 31, 2024 and sell it today you would earn a total of 2,582 from holding Lundin Mining Corp or generate 32.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.75% |
| Values | Daily Returns |
Aeorema Communications Plc vs. Lundin Mining Corp
Performance |
| Timeline |
| Aeorema Communications |
| Lundin Mining Corp |
Aeorema Communications and Lundin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeorema Communications and Lundin Mining
The main advantage of trading using opposite Aeorema Communications and Lundin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeorema Communications 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.| Aeorema Communications vs. Ironveld Plc | Aeorema Communications vs. Impax Environmental Markets | Aeorema Communications vs. Hochschild Mining plc | Aeorema Communications vs. Endeavour Mining Corp |
| Lundin Mining vs. Neometals | Lundin Mining vs. Coor Service Management | Lundin Mining vs. Aeorema Communications Plc | Lundin Mining vs. JLEN Environmental Assets |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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