Correlation Between Lundin Mining and Firefly AB
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and Firefly AB 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 Firefly AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lundin Mining and Firefly AB, you can compare the effects of market volatilities on Lundin Mining and Firefly AB 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 Firefly AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Firefly AB.
Diversification Opportunities for Lundin Mining and Firefly AB
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lundin and Firefly is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining and Firefly AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firefly AB 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 Firefly AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firefly AB has no effect on the direction of Lundin Mining i.e., Lundin Mining and Firefly AB go up and down completely randomly.
Pair Corralation between Lundin Mining and Firefly AB
Assuming the 90 days trading horizon Lundin Mining is expected to under-perform the Firefly AB. But the stock apears to be less risky and, when comparing its historical volatility, Lundin Mining is 1.12 times less risky than Firefly AB. The stock trades about -0.01 of its potential returns per unit of risk. The Firefly AB is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 17,750 in Firefly AB on October 25, 2024 and sell it today you would lose (100.00) from holding Firefly AB or give up 0.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lundin Mining vs. Firefly AB
Performance |
| Timeline |
| Lundin Mining |
| Firefly AB |
Lundin Mining and Firefly AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and Firefly AB
The main advantage of trading using opposite Lundin Mining and Firefly AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, Firefly AB 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 Firefly AB will offset losses from the drop in Firefly AB's long position.| Lundin Mining vs. Boliden AB | Lundin Mining vs. Lundin Gold | Lundin Mining vs. SSAB AB | Lundin Mining vs. AB SKF |
| Firefly AB vs. Isofol Medical AB | Firefly AB vs. Redsense Medical AB | Firefly AB vs. Kinnevik Investment AB | Firefly AB vs. Spago Nanomedical 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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