Correlation Between Lundin Gold and Minera Alamos
Can any of the company-specific risk be diversified away by investing in both Lundin Gold and Minera Alamos 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 Minera Alamos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lundin Gold and Minera Alamos, you can compare the effects of market volatilities on Lundin Gold and Minera Alamos 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 Minera Alamos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Gold and Minera Alamos.
Diversification Opportunities for Lundin Gold and Minera Alamos
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lundin and Minera is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Gold and Minera Alamos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minera Alamos 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 Minera Alamos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minera Alamos has no effect on the direction of Lundin Gold i.e., Lundin Gold and Minera Alamos go up and down completely randomly.
Pair Corralation between Lundin Gold and Minera Alamos
Assuming the 90 days horizon Lundin Gold is expected to generate 0.59 times more return on investment than Minera Alamos. However, Lundin Gold is 1.69 times less risky than Minera Alamos. It trades about -0.04 of its potential returns per unit of risk. Minera Alamos is currently generating about -0.26 per unit of risk. If you would invest 2,405 in Lundin Gold on August 29, 2024 and sell it today you would lose (75.00) from holding Lundin Gold or give up 3.12% 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. Minera Alamos
Performance |
| Timeline |
| Lundin Gold |
| Minera Alamos |
Lundin Gold and Minera Alamos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Gold and Minera Alamos
The main advantage of trading using opposite Lundin Gold and Minera Alamos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Gold position performs unexpectedly, Minera Alamos 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 Minera Alamos will offset losses from the drop in Minera Alamos' long position.| Lundin Gold vs. Vertiv Holdings Co | Lundin Gold vs. Nasdaq Inc | Lundin Gold vs. McDonalds | Lundin Gold vs. Walmart |
| Minera Alamos vs. Aurion Resources | Minera Alamos vs. Minaurum Gold | Minera Alamos vs. Rio2 Limited | Minera Alamos vs. Roscan Gold Corp |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Stocks Directory Find actively traded stocks across global markets |