Correlation Between Lundin Energy and Environmmtl Tectonic
Can any of the company-specific risk be diversified away by investing in both Lundin Energy and Environmmtl Tectonic 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 Lundin Energy and Environmmtl Tectonic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lundin Energy AB and Environmmtl Tectonic, you can compare the effects of market volatilities on Lundin Energy and Environmmtl Tectonic 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 Lundin Energy with a short position of Environmmtl Tectonic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Energy and Environmmtl Tectonic.
Diversification Opportunities for Lundin Energy and Environmmtl Tectonic
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lundin and Environmmtl is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Energy AB and Environmmtl Tectonic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Environmmtl Tectonic and Lundin Energy 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 Lundin Energy AB are associated (or correlated) with Environmmtl Tectonic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Environmmtl Tectonic has no effect on the direction of Lundin Energy i.e., Lundin Energy and Environmmtl Tectonic go up and down completely randomly.
Pair Corralation between Lundin Energy and Environmmtl Tectonic
Assuming the 90 days horizon Lundin Energy AB is expected to under-perform the Environmmtl Tectonic. But the pink sheet apears to be less risky and, when comparing its historical volatility, Lundin Energy AB is 2.29 times less risky than Environmmtl Tectonic. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Environmmtl Tectonic is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 63.00 in Environmmtl Tectonic on August 26, 2024 and sell it today you would earn a total of 137.00 from holding Environmmtl Tectonic or generate 217.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lundin Energy AB vs. Environmmtl Tectonic
Performance |
| Timeline |
| Lundin Energy AB |
| Environmmtl Tectonic |
Lundin Energy and Environmmtl Tectonic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Energy and Environmmtl Tectonic
The main advantage of trading using opposite Lundin Energy and Environmmtl Tectonic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Energy position performs unexpectedly, Environmmtl Tectonic 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 Environmmtl Tectonic will offset losses from the drop in Environmmtl Tectonic's long position.| Lundin Energy vs. Renew Energy Global | Lundin Energy vs. Energy Vault Holdings | Lundin Energy vs. Fluence Energy | Lundin Energy vs. Advent Technologies Holdings |
| Environmmtl Tectonic vs. Element Solutions | Environmmtl Tectonic vs. Orion Engineered Carbons | Environmmtl Tectonic vs. Minerals Technologies | Environmmtl Tectonic vs. Ingevity Corp |
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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