Correlation Between Lundin Mining and Arctic Paper
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and Arctic Paper 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 Paper 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 Paper SA, you can compare the effects of market volatilities on Lundin Mining and Arctic Paper 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 Paper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Arctic Paper.
Diversification Opportunities for Lundin Mining and Arctic Paper
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lundin and Arctic is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining and Arctic Paper SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arctic Paper SA 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 Paper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arctic Paper SA has no effect on the direction of Lundin Mining i.e., Lundin Mining and Arctic Paper go up and down completely randomly.
Pair Corralation between Lundin Mining and Arctic Paper
Assuming the 90 days trading horizon Lundin Mining is expected to under-perform the Arctic Paper. In addition to that, Lundin Mining is 1.02 times more volatile than Arctic Paper SA. It trades about -0.05 of its total potential returns per unit of risk. Arctic Paper SA is currently generating about 0.03 per unit of volatility. If you would invest 4,188 in Arctic Paper SA on September 12, 2024 and sell it today you would earn a total of 30.00 from holding Arctic Paper SA or generate 0.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lundin Mining vs. Arctic Paper SA
Performance |
| Timeline |
| Lundin Mining |
| Arctic Paper SA |
Lundin Mining and Arctic Paper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and Arctic Paper
The main advantage of trading using opposite Lundin Mining and Arctic Paper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, Arctic Paper 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 Paper will offset losses from the drop in Arctic Paper's long position.| Lundin Mining vs. Boliden AB | Lundin Mining vs. SSAB AB | Lundin Mining vs. AB SKF | Lundin Mining vs. Sandvik AB |
| Arctic Paper vs. Catena Media plc | Arctic Paper vs. USWE Sports AB | Arctic Paper vs. Online Brands Nordic | Arctic Paper vs. Viva Wine Group |
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 Directory module to find actively traded commodities issued by global exchanges.
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