Correlation Between Impax Asset and Lundin Mining
Can any of the company-specific risk be diversified away by investing in both Impax Asset 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 Impax Asset and Lundin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Impax Asset Management and Lundin Mining Corp, you can compare the effects of market volatilities on Impax Asset 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 Impax Asset with a short position of Lundin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impax Asset and Lundin Mining.
Diversification Opportunities for Impax Asset and Lundin Mining
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Impax and Lundin is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Impax Asset Management 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 Impax Asset 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 Impax Asset Management 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 Impax Asset i.e., Impax Asset and Lundin Mining go up and down completely randomly.
Pair Corralation between Impax Asset and Lundin Mining
Assuming the 90 days trading horizon Impax Asset Management is expected to under-perform the Lundin Mining. In addition to that, Impax Asset is 1.86 times more volatile than Lundin Mining Corp. It trades about -0.19 of its total potential returns per unit of risk. Lundin Mining Corp is currently generating about -0.08 per unit of volatility. If you would invest 10,585 in Lundin Mining Corp on October 11, 2024 and sell it today you would lose (880.00) from holding Lundin Mining Corp or give up 8.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Impax Asset Management vs. Lundin Mining Corp
Performance |
| Timeline |
| Impax Asset Management |
| Lundin Mining Corp |
Impax Asset and Lundin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impax Asset and Lundin Mining
The main advantage of trading using opposite Impax Asset and Lundin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impax Asset 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.| Impax Asset vs. Telecom Italia SpA | Impax Asset vs. HCA Healthcare | Impax Asset vs. Aeorema Communications Plc | Impax Asset vs. Medical Properties Trust |
| Lundin Mining vs. Charter Communications Cl | Lundin Mining vs. Zinc Media Group | Lundin Mining vs. Ecofin Global Utilities | Lundin Mining vs. United Utilities Group |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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