Correlation Between Lundin Mining and Arctic Blue
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and Arctic Blue 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 Mining and Arctic Blue into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lundin Mining and Arctic Blue Beverages, you can compare the effects of market volatilities on Lundin Mining and Arctic Blue 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 Mining with a short position of Arctic Blue. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Arctic Blue.
Diversification Opportunities for Lundin Mining and Arctic Blue
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lundin and Arctic is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining and Arctic Blue Beverages in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arctic Blue Beverages and Lundin Mining 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 Mining are associated (or correlated) with Arctic Blue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arctic Blue Beverages has no effect on the direction of Lundin Mining i.e., Lundin Mining and Arctic Blue go up and down completely randomly.
Pair Corralation between Lundin Mining and Arctic Blue
Assuming the 90 days trading horizon Lundin Mining is expected to generate 0.4 times more return on investment than Arctic Blue. However, Lundin Mining is 2.48 times less risky than Arctic Blue. It trades about 0.08 of its potential returns per unit of risk. Arctic Blue Beverages is currently generating about -0.01 per unit of risk. If you would invest 8,107 in Lundin Mining on August 27, 2024 and sell it today you would earn a total of 2,983 from holding Lundin Mining or generate 36.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lundin Mining vs. Arctic Blue Beverages
Performance |
| Timeline |
| Lundin Mining |
| Arctic Blue Beverages |
Lundin Mining and Arctic Blue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and Arctic Blue
The main advantage of trading using opposite Lundin Mining and Arctic Blue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, Arctic Blue 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 Arctic Blue will offset losses from the drop in Arctic Blue's long position.| Lundin Mining vs. Boliden AB | Lundin Mining vs. SSAB AB | Lundin Mining vs. AB SKF | Lundin Mining vs. Sandvik AB |
| Arctic Blue vs. Cint Group AB | Arctic Blue vs. Nordic Waterproofing Holding | Arctic Blue vs. Inwido AB | Arctic Blue vs. KABE Group AB |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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