Correlation Between Dalata Hotel and Lundin Mining
Can any of the company-specific risk be diversified away by investing in both Dalata Hotel 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 Dalata Hotel and Lundin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dalata Hotel Group and Lundin Mining Corp, you can compare the effects of market volatilities on Dalata Hotel 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 Dalata Hotel with a short position of Lundin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dalata Hotel and Lundin Mining.
Diversification Opportunities for Dalata Hotel and Lundin Mining
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dalata and Lundin is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Dalata Hotel Group 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 Dalata Hotel 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 Dalata Hotel Group 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 Dalata Hotel i.e., Dalata Hotel and Lundin Mining go up and down completely randomly.
Pair Corralation between Dalata Hotel and Lundin Mining
Assuming the 90 days trading horizon Dalata Hotel Group is expected to generate 0.69 times more return on investment than Lundin Mining. However, Dalata Hotel Group is 1.44 times less risky than Lundin Mining. It trades about 0.18 of its potential returns per unit of risk. Lundin Mining Corp is currently generating about -0.09 per unit of risk. If you would invest 34,900 in Dalata Hotel Group on August 31, 2024 and sell it today you would earn a total of 2,600 from holding Dalata Hotel Group or generate 7.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dalata Hotel Group vs. Lundin Mining Corp
Performance |
| Timeline |
| Dalata Hotel Group |
| Lundin Mining Corp |
Dalata Hotel and Lundin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dalata Hotel and Lundin Mining
The main advantage of trading using opposite Dalata Hotel and Lundin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dalata Hotel 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.| Dalata Hotel vs. Berkshire Hathaway | Dalata Hotel vs. Hyundai Motor | Dalata Hotel vs. Samsung Electronics Co | Dalata Hotel vs. Samsung Electronics Co |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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