Correlation Between Binero Group and Lundin Mining
Can any of the company-specific risk be diversified away by investing in both Binero Group 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 Binero Group and Lundin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binero Group AB and Lundin Mining, you can compare the effects of market volatilities on Binero Group 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 Binero Group with a short position of Lundin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binero Group and Lundin Mining.
Diversification Opportunities for Binero Group and Lundin Mining
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Binero and Lundin is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Binero Group AB and Lundin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Mining and Binero Group 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 Binero Group AB 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 Binero Group i.e., Binero Group and Lundin Mining go up and down completely randomly.
Pair Corralation between Binero Group and Lundin Mining
Assuming the 90 days trading horizon Binero Group AB is expected to generate 1.86 times more return on investment than Lundin Mining. However, Binero Group is 1.86 times more volatile than Lundin Mining. It trades about 0.07 of its potential returns per unit of risk. Lundin Mining is currently generating about 0.01 per unit of risk. If you would invest 268.00 in Binero Group AB on August 29, 2024 and sell it today you would earn a total of 12.00 from holding Binero Group AB or generate 4.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Binero Group AB vs. Lundin Mining
Performance |
| Timeline |
| Binero Group AB |
| Lundin Mining |
Binero Group and Lundin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binero Group and Lundin Mining
The main advantage of trading using opposite Binero Group and Lundin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binero Group 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.| Binero Group vs. AAC Clyde Space | Binero Group vs. Mavshack publ AB | Binero Group vs. Tangiamo Touch Technology | Binero Group vs. XMReality AB |
| Lundin Mining vs. Boliden AB | Lundin Mining vs. SSAB AB | Lundin Mining vs. AB SKF | Lundin Mining vs. Sandvik AB |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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