Correlation Between Lundin Mining and Klimator
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and Klimator 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 Klimator into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lundin Mining and Klimator AB, you can compare the effects of market volatilities on Lundin Mining and Klimator 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 Klimator. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Klimator.
Diversification Opportunities for Lundin Mining and Klimator
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lundin and Klimator is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining and Klimator AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klimator 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 Klimator. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klimator AB has no effect on the direction of Lundin Mining i.e., Lundin Mining and Klimator go up and down completely randomly.
Pair Corralation between Lundin Mining and Klimator
Assuming the 90 days trading horizon Lundin Mining is expected to generate 0.84 times more return on investment than Klimator. However, Lundin Mining is 1.19 times less risky than Klimator. It trades about 0.06 of its potential returns per unit of risk. Klimator AB is currently generating about 0.01 per unit of risk. If you would invest 5,824 in Lundin Mining on September 2, 2024 and sell it today you would earn a total of 4,836 from holding Lundin Mining or generate 83.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lundin Mining vs. Klimator AB
Performance |
| Timeline |
| Lundin Mining |
| Klimator AB |
Lundin Mining and Klimator Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and Klimator
The main advantage of trading using opposite Lundin Mining and Klimator positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, Klimator 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 Klimator will offset losses from the drop in Klimator's long position.| Lundin Mining vs. Boliden AB | Lundin Mining vs. SSAB AB | Lundin Mining vs. AB SKF | Lundin Mining vs. Sandvik AB |
| Klimator vs. Lundin Mining | Klimator vs. Indutrade AB | Klimator vs. Havsfrun Investment AB | Klimator vs. Skandinaviska Enskilda Banken |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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