Correlation Between Lundin Mining and Filo Mining
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and Filo 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 Mining and Filo Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lundin Mining and Filo Mining Corp, you can compare the effects of market volatilities on Lundin Mining and Filo 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 Mining with a short position of Filo Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Filo Mining.
Diversification Opportunities for Lundin Mining and Filo Mining
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lundin and Filo is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining and Filo Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Filo Mining Corp 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 Filo Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Filo Mining Corp has no effect on the direction of Lundin Mining i.e., Lundin Mining and Filo Mining go up and down completely randomly.
Pair Corralation between Lundin Mining and Filo Mining
Assuming the 90 days trading horizon Lundin Mining is expected to generate 1.25 times less return on investment than Filo Mining. In addition to that, Lundin Mining is 1.13 times more volatile than Filo Mining Corp. It trades about 0.08 of its total potential returns per unit of risk. Filo Mining Corp is currently generating about 0.11 per unit of volatility. If you would invest 16,800 in Filo Mining Corp on August 27, 2024 and sell it today you would earn a total of 8,950 from holding Filo Mining Corp or generate 53.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lundin Mining vs. Filo Mining Corp
Performance |
| Timeline |
| Lundin Mining |
| Filo Mining Corp |
Lundin Mining and Filo Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and Filo Mining
The main advantage of trading using opposite Lundin Mining and Filo Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, Filo 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 Filo Mining will offset losses from the drop in Filo Mining's long position.| Lundin Mining vs. Boliden AB | Lundin Mining vs. SSAB AB | Lundin Mining vs. AB SKF | Lundin Mining vs. Sandvik AB |
| Filo Mining vs. Lohilo Foods AB | Filo Mining vs. Addtech AB | Filo Mining vs. Vitec Software Group | Filo Mining vs. AVTECH Sweden 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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