Correlation Between Charter Communications and Lundin Mining
Can any of the company-specific risk be diversified away by investing in both Charter 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 Charter 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 Charter Communications and Lundin Mining, you can compare the effects of market volatilities on Charter 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 Charter Communications with a short position of Lundin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Communications and Lundin Mining.
Diversification Opportunities for Charter Communications and Lundin Mining
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Charter and Lundin is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Charter Communications and Lundin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Mining and Charter 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 Charter Communications 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 Charter Communications i.e., Charter Communications and Lundin Mining go up and down completely randomly.
Pair Corralation between Charter Communications and Lundin Mining
Assuming the 90 days trading horizon Charter Communications is expected to under-perform the Lundin Mining. In addition to that, Charter Communications is 1.28 times more volatile than Lundin Mining. It trades about -0.05 of its total potential returns per unit of risk. Lundin Mining is currently generating about 0.04 per unit of volatility. If you would invest 861.00 in Lundin Mining on September 15, 2024 and sell it today you would earn a total of 10.00 from holding Lundin Mining or generate 1.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charter Communications vs. Lundin Mining
Performance |
| Timeline |
| Charter Communications |
| Lundin Mining |
Charter Communications and Lundin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Communications and Lundin Mining
The main advantage of trading using opposite Charter Communications and Lundin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter 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.| Charter Communications vs. Apple Inc | Charter Communications vs. Apple Inc | Charter Communications vs. Apple Inc | Charter Communications vs. Apple Inc |
| Lundin Mining vs. CITIC Telecom International | Lundin Mining vs. COMBA TELECOM SYST | Lundin Mining vs. Verizon Communications | Lundin Mining vs. Charter Communications |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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