Correlation Between Ecclesiastical Insurance and Lundin Mining
Can any of the company-specific risk be diversified away by investing in both Ecclesiastical Insurance 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 Ecclesiastical Insurance and Lundin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecclesiastical Insurance Office and Lundin Mining Corp, you can compare the effects of market volatilities on Ecclesiastical Insurance 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 Ecclesiastical Insurance with a short position of Lundin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecclesiastical Insurance and Lundin Mining.
Diversification Opportunities for Ecclesiastical Insurance and Lundin Mining
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ecclesiastical and Lundin is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Ecclesiastical Insurance Offic 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 Ecclesiastical Insurance 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 Ecclesiastical Insurance Office 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 Ecclesiastical Insurance i.e., Ecclesiastical Insurance and Lundin Mining go up and down completely randomly.
Pair Corralation between Ecclesiastical Insurance and Lundin Mining
Assuming the 90 days trading horizon Ecclesiastical Insurance Office is expected to under-perform the Lundin Mining. But the stock apears to be less risky and, when comparing its historical volatility, Ecclesiastical Insurance Office is 1.89 times less risky than Lundin Mining. The stock trades about -0.05 of its potential returns per unit of risk. The Lundin Mining Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 10,491 in Lundin Mining Corp on September 2, 2024 and sell it today you would earn a total of 264.00 from holding Lundin Mining Corp or generate 2.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ecclesiastical Insurance Offic vs. Lundin Mining Corp
Performance |
| Timeline |
| Ecclesiastical Insurance |
| Lundin Mining Corp |
Ecclesiastical Insurance and Lundin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecclesiastical Insurance and Lundin Mining
The main advantage of trading using opposite Ecclesiastical Insurance and Lundin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecclesiastical Insurance 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.| Ecclesiastical Insurance vs. Toyota Motor Corp | Ecclesiastical Insurance vs. SoftBank Group Corp | Ecclesiastical Insurance vs. Fannie Mae | Ecclesiastical Insurance vs. Apple Inc |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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