Correlation Between Lundin Mining and MTI Investment
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and MTI Investment 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 MTI Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lundin Mining and MTI Investment SE, you can compare the effects of market volatilities on Lundin Mining and MTI Investment 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 MTI Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and MTI Investment.
Diversification Opportunities for Lundin Mining and MTI Investment
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lundin and MTI is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining and MTI Investment SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTI Investment SE 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 MTI Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MTI Investment SE has no effect on the direction of Lundin Mining i.e., Lundin Mining and MTI Investment go up and down completely randomly.
Pair Corralation between Lundin Mining and MTI Investment
Assuming the 90 days trading horizon Lundin Mining is expected to generate 0.52 times more return on investment than MTI Investment. However, Lundin Mining is 1.92 times less risky than MTI Investment. It trades about 0.05 of its potential returns per unit of risk. MTI Investment SE is currently generating about -0.05 per unit of risk. If you would invest 7,677 in Lundin Mining on September 12, 2024 and sell it today you would earn a total of 2,653 from holding Lundin Mining or generate 34.56% 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. MTI Investment SE
Performance |
| Timeline |
| Lundin Mining |
| MTI Investment SE |
Lundin Mining and MTI Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and MTI Investment
The main advantage of trading using opposite Lundin Mining and MTI Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, MTI Investment 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 MTI Investment will offset losses from the drop in MTI Investment's long position.| Lundin Mining vs. Boliden AB | Lundin Mining vs. SSAB AB | Lundin Mining vs. AB SKF | Lundin Mining vs. Sandvik AB |
| MTI Investment vs. Catella AB | MTI Investment vs. Catella AB A | MTI Investment vs. KABE Group AB | MTI Investment vs. IAR Systems 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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