Correlation Between Arion Banki and Lundin Mining
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By analyzing existing cross correlation between Arion banki hf and Lundin Mining, you can compare the effects of market volatilities on Arion Banki 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 Arion Banki with a short position of Lundin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arion Banki and Lundin Mining.
Diversification Opportunities for Arion Banki and Lundin Mining
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Arion and Lundin is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Arion banki hf and Lundin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Mining and Arion Banki 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 Arion banki hf 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 has no effect on the direction of Arion Banki i.e., Arion Banki and Lundin Mining go up and down completely randomly.
Pair Corralation between Arion Banki and Lundin Mining
Assuming the 90 days trading horizon Arion banki hf is expected to generate 0.76 times more return on investment than Lundin Mining. However, Arion banki hf is 1.32 times less risky than Lundin Mining. It trades about 0.18 of its potential returns per unit of risk. Lundin Mining is currently generating about 0.01 per unit of risk. If you would invest 1,080 in Arion banki hf on August 30, 2024 and sell it today you would earn a total of 155.00 from holding Arion banki hf or generate 14.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arion banki hf vs. Lundin Mining
Performance |
| Timeline |
| Arion banki hf |
| Lundin Mining |
Arion Banki and Lundin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arion Banki and Lundin Mining
The main advantage of trading using opposite Arion Banki and Lundin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arion Banki 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.| Arion Banki vs. Atrium Ljungberg AB | Arion Banki vs. Bravida Holding AB | Arion Banki vs. Avanza Bank Holding | Arion Banki vs. Autoliv |
| Lundin Mining vs. Boliden AB | Lundin Mining vs. Lundin Gold | Lundin Mining vs. SSAB AB | Lundin Mining vs. AB SKF |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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