Correlation Between Lundin Gold and Aimia
Can any of the company-specific risk be diversified away by investing in both Lundin Gold and Aimia 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 Aimia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lundin Gold and Aimia Inc, you can compare the effects of market volatilities on Lundin Gold and Aimia 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 Aimia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Gold and Aimia.
Diversification Opportunities for Lundin Gold and Aimia
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lundin and Aimia is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Gold and Aimia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aimia Inc 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 Aimia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aimia Inc has no effect on the direction of Lundin Gold i.e., Lundin Gold and Aimia go up and down completely randomly.
Pair Corralation between Lundin Gold and Aimia
Assuming the 90 days trading horizon Lundin Gold is expected to generate 1.09 times more return on investment than Aimia. However, Lundin Gold is 1.09 times more volatile than Aimia Inc. It trades about 0.1 of its potential returns per unit of risk. Aimia Inc is currently generating about -0.03 per unit of risk. If you would invest 1,516 in Lundin Gold on August 28, 2024 and sell it today you would earn a total of 1,662 from holding Lundin Gold or generate 109.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lundin Gold vs. Aimia Inc
Performance |
| Timeline |
| Lundin Gold |
| Aimia Inc |
Lundin Gold and Aimia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Gold and Aimia
The main advantage of trading using opposite Lundin Gold and Aimia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Gold position performs unexpectedly, Aimia 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 Aimia will offset losses from the drop in Aimia'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 |
| Aimia vs. Autocanada | Aimia vs. Corus Entertainment | Aimia vs. Element Fleet Management | Aimia vs. Dorel Industries |
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 Stocks Directory module to find actively traded stocks across global markets.
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