Correlation Between Lundin Gold and Inwido AB
Can any of the company-specific risk be diversified away by investing in both Lundin Gold and Inwido AB 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 Gold and Inwido AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lundin Gold and Inwido AB, you can compare the effects of market volatilities on Lundin Gold and Inwido AB 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 Gold with a short position of Inwido AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Gold and Inwido AB.
Diversification Opportunities for Lundin Gold and Inwido AB
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lundin and Inwido is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Gold and Inwido AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inwido AB and Lundin Gold 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 Gold are associated (or correlated) with Inwido AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inwido AB has no effect on the direction of Lundin Gold i.e., Lundin Gold and Inwido AB go up and down completely randomly.
Pair Corralation between Lundin Gold and Inwido AB
Assuming the 90 days trading horizon Lundin Gold is expected to generate 1.69 times more return on investment than Inwido AB. However, Lundin Gold is 1.69 times more volatile than Inwido AB. It trades about 0.09 of its potential returns per unit of risk. Inwido AB is currently generating about 0.08 per unit of risk. If you would invest 24,499 in Lundin Gold on October 26, 2024 and sell it today you would earn a total of 2,001 from holding Lundin Gold or generate 8.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.44% |
| Values | Daily Returns |
Lundin Gold vs. Inwido AB
Performance |
| Timeline |
| Lundin Gold |
| Inwido AB |
Lundin Gold and Inwido AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Gold and Inwido AB
The main advantage of trading using opposite Lundin Gold and Inwido AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Gold position performs unexpectedly, Inwido AB 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 Inwido AB will offset losses from the drop in Inwido AB's long position.| Lundin Gold vs. Lundin Mining | Lundin Gold vs. Africa Oil Corp | Lundin Gold vs. International Petroleum | Lundin Gold vs. Boliden AB |
| Inwido AB vs. MTI Investment SE | Inwido AB vs. Lime Technologies AB | Inwido AB vs. SaltX Technology Holding | Inwido AB vs. Kinnevik Investment AB |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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