Correlation Between Lundin Energy and BANDAI NAMCO
Can any of the company-specific risk be diversified away by investing in both Lundin Energy and BANDAI NAMCO 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 BANDAI NAMCO 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 BANDAI NAMCO Holdings, you can compare the effects of market volatilities on Lundin Energy and BANDAI NAMCO 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 BANDAI NAMCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Energy and BANDAI NAMCO.
Diversification Opportunities for Lundin Energy and BANDAI NAMCO
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lundin and BANDAI is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Energy AB and BANDAI NAMCO Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANDAI NAMCO Holdings 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 BANDAI NAMCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANDAI NAMCO Holdings has no effect on the direction of Lundin Energy i.e., Lundin Energy and BANDAI NAMCO go up and down completely randomly.
Pair Corralation between Lundin Energy and BANDAI NAMCO
Assuming the 90 days horizon Lundin Energy AB is expected to under-perform the BANDAI NAMCO. In addition to that, Lundin Energy is 2.09 times more volatile than BANDAI NAMCO Holdings. It trades about -0.04 of its total potential returns per unit of risk. BANDAI NAMCO Holdings is currently generating about 0.01 per unit of volatility. If you would invest 1,104 in BANDAI NAMCO Holdings on October 20, 2024 and sell it today you would earn a total of 24.00 from holding BANDAI NAMCO Holdings or generate 2.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lundin Energy AB vs. BANDAI NAMCO Holdings
Performance |
| Timeline |
| Lundin Energy AB |
| BANDAI NAMCO Holdings |
Lundin Energy and BANDAI NAMCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Energy and BANDAI NAMCO
The main advantage of trading using opposite Lundin Energy and BANDAI NAMCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Energy position performs unexpectedly, BANDAI NAMCO 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 BANDAI NAMCO will offset losses from the drop in BANDAI NAMCO'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 |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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