Correlation Between Golden Metal and Lundin Mining
Can any of the company-specific risk be diversified away by investing in both Golden Metal 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 Golden Metal and Lundin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Metal Resources and Lundin Mining Corp, you can compare the effects of market volatilities on Golden Metal 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 Golden Metal with a short position of Lundin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Metal and Lundin Mining.
Diversification Opportunities for Golden Metal and Lundin Mining
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Golden and Lundin is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Golden Metal Resources 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 Golden Metal 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 Golden Metal Resources 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 Golden Metal i.e., Golden Metal and Lundin Mining go up and down completely randomly.
Pair Corralation between Golden Metal and Lundin Mining
Assuming the 90 days trading horizon Golden Metal Resources is expected to generate 0.93 times more return on investment than Lundin Mining. However, Golden Metal Resources is 1.08 times less risky than Lundin Mining. It trades about 0.28 of its potential returns per unit of risk. Lundin Mining Corp is currently generating about 0.07 per unit of risk. If you would invest 2,900 in Golden Metal Resources on October 18, 2024 and sell it today you would earn a total of 350.00 from holding Golden Metal Resources or generate 12.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Metal Resources vs. Lundin Mining Corp
Performance |
| Timeline |
| Golden Metal Resources |
| Lundin Mining Corp |
Golden Metal and Lundin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Metal and Lundin Mining
The main advantage of trading using opposite Golden Metal and Lundin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Metal 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.| Golden Metal vs. Zegona Communications Plc | Golden Metal vs. Primary Health Properties | Golden Metal vs. Cardinal Health | Golden Metal vs. Zoom Video Communications |
| Lundin Mining vs. Air Products Chemicals | Lundin Mining vs. Broadridge Financial Solutions | Lundin Mining vs. Golden Metal Resources | Lundin Mining vs. Europa Metals |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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