Correlation Between Lundin Energy and TILT Holdings
Can any of the company-specific risk be diversified away by investing in both Lundin Energy and TILT Holdings 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 TILT Holdings 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 TILT Holdings, you can compare the effects of market volatilities on Lundin Energy and TILT Holdings 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 TILT Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Energy and TILT Holdings.
Diversification Opportunities for Lundin Energy and TILT Holdings
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lundin and TILT is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Energy AB and TILT Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TILT 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 TILT Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TILT Holdings has no effect on the direction of Lundin Energy i.e., Lundin Energy and TILT Holdings go up and down completely randomly.
Pair Corralation between Lundin Energy and TILT Holdings
Assuming the 90 days horizon Lundin Energy AB is expected to under-perform the TILT Holdings. But the pink sheet apears to be less risky and, when comparing its historical volatility, Lundin Energy AB is 2.27 times less risky than TILT Holdings. The pink sheet trades about -0.03 of its potential returns per unit of risk. The TILT Holdings is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 6.20 in TILT Holdings on August 28, 2024 and sell it today you would lose (5.50) from holding TILT Holdings or give up 88.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lundin Energy AB vs. TILT Holdings
Performance |
| Timeline |
| Lundin Energy AB |
| TILT Holdings |
Lundin Energy and TILT Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Energy and TILT Holdings
The main advantage of trading using opposite Lundin Energy and TILT Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Energy position performs unexpectedly, TILT Holdings 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 TILT Holdings will offset losses from the drop in TILT Holdings' 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 |
| TILT Holdings vs. Cansortium | TILT Holdings vs. 4Front Ventures Corp | TILT Holdings vs. Medipharm Labs Corp | TILT Holdings vs. Khiron Life Sciences |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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