Correlation Between Lundin Gold and Centerra Gold
Can any of the company-specific risk be diversified away by investing in both Lundin Gold and Centerra 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 Centerra 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 Centerra Gold, you can compare the effects of market volatilities on Lundin Gold and Centerra 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 Centerra Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Gold and Centerra Gold.
Diversification Opportunities for Lundin Gold and Centerra Gold
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lundin and Centerra is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Gold and Centerra Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centerra 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 Centerra Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centerra Gold has no effect on the direction of Lundin Gold i.e., Lundin Gold and Centerra Gold go up and down completely randomly.
Pair Corralation between Lundin Gold and Centerra Gold
Assuming the 90 days trading horizon Lundin Gold is expected to generate 1.0 times more return on investment than Centerra Gold. However, Lundin Gold is 1.0 times less risky than Centerra Gold. It trades about -0.05 of its potential returns per unit of risk. Centerra Gold is currently generating about -0.29 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lundin Gold vs. Centerra Gold
Performance |
| Timeline |
| Lundin Gold |
| Centerra Gold |
Lundin Gold and Centerra Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Gold and Centerra Gold
The main advantage of trading using opposite Lundin Gold and Centerra Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Gold position performs unexpectedly, Centerra 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 Centerra Gold will offset losses from the drop in Centerra 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 |
| Centerra Gold vs. Alamos Gold | Centerra Gold vs. NovaGold Resources | Centerra Gold vs. Eldorado Gold Corp | Centerra Gold vs. IAMGold |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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