Correlation Between Lundin Gold and SSR Mining
Can any of the company-specific risk be diversified away by investing in both Lundin Gold and SSR Mining 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 SSR Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lundin Gold and SSR Mining, you can compare the effects of market volatilities on Lundin Gold and SSR Mining 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 SSR Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Gold and SSR Mining.
Diversification Opportunities for Lundin Gold and SSR Mining
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lundin and SSR is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Gold and SSR Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSR Mining 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 SSR Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSR Mining has no effect on the direction of Lundin Gold i.e., Lundin Gold and SSR Mining go up and down completely randomly.
Pair Corralation between Lundin Gold and SSR Mining
Assuming the 90 days trading horizon Lundin Gold is expected to generate 0.63 times more return on investment than SSR Mining. However, Lundin Gold is 1.58 times less risky than SSR Mining. It trades about -0.05 of its potential returns per unit of risk. SSR Mining is currently generating about -0.08 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 | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lundin Gold vs. SSR Mining
Performance |
| Timeline |
| Lundin Gold |
| SSR Mining |
Lundin Gold and SSR Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Gold and SSR Mining
The main advantage of trading using opposite Lundin Gold and SSR Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Gold position performs unexpectedly, SSR Mining 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 SSR Mining will offset losses from the drop in SSR Mining'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 |
| SSR Mining vs. Pan American Silver | SSR Mining vs. MAG Silver Corp | SSR Mining vs. Osisko Gold Ro | SSR Mining vs. Sandstorm Gold Ltd |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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