Correlation Between Lundin Gold and Alamos Gold
Can any of the company-specific risk be diversified away by investing in both Lundin Gold and Alamos Gold 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 Alamos Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lundin Gold and Alamos Gold, you can compare the effects of market volatilities on Lundin Gold and Alamos Gold 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 Alamos Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Gold and Alamos Gold.
Diversification Opportunities for Lundin Gold and Alamos Gold
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lundin and Alamos is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Gold and Alamos Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alamos Gold 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 Alamos Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alamos Gold has no effect on the direction of Lundin Gold i.e., Lundin Gold and Alamos Gold go up and down completely randomly.
Pair Corralation between Lundin Gold and Alamos Gold
Assuming the 90 days trading horizon Lundin Gold is expected to generate 1.18 times more return on investment than Alamos Gold. However, Lundin Gold is 1.18 times more volatile than Alamos Gold. It trades about -0.05 of its potential returns per unit of risk. Alamos Gold is currently generating about -0.19 per unit of risk. If you would invest 3,345 in Lundin Gold on August 29, 2024 and sell it today you would lose (121.00) from holding Lundin Gold or give up 3.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lundin Gold vs. Alamos Gold
Performance |
| Timeline |
| Lundin Gold |
| Alamos Gold |
Lundin Gold and Alamos Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Gold and Alamos Gold
The main advantage of trading using opposite Lundin Gold and Alamos Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Gold position performs unexpectedly, Alamos Gold 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 Alamos Gold will offset losses from the drop in Alamos Gold's long position.| Lundin Gold vs. Osisko Gold Ro | Lundin Gold vs. Dundee Precious Metals | Lundin Gold vs. SSR Mining | Lundin Gold vs. Sandstorm Gold Ltd |
| Alamos Gold vs. Advent Wireless | Alamos Gold vs. Information Services | Alamos Gold vs. Verizon Communications CDR | Alamos Gold vs. Cogeco Communications |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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