Correlation Between Lundin Mining and AB Sagax
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and AB Sagax 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 AB Sagax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lundin Mining and AB Sagax, you can compare the effects of market volatilities on Lundin Mining and AB Sagax 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 AB Sagax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and AB Sagax.
Diversification Opportunities for Lundin Mining and AB Sagax
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lundin and SAGA-A is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining and AB Sagax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB Sagax 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 AB Sagax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB Sagax has no effect on the direction of Lundin Mining i.e., Lundin Mining and AB Sagax go up and down completely randomly.
Pair Corralation between Lundin Mining and AB Sagax
Assuming the 90 days trading horizon Lundin Mining is expected to under-perform the AB Sagax. But the stock apears to be less risky and, when comparing its historical volatility, Lundin Mining is 1.14 times less risky than AB Sagax. The stock trades about -0.12 of its potential returns per unit of risk. The AB Sagax is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 22,600 in AB Sagax on November 2, 2024 and sell it today you would earn a total of 1,800 from holding AB Sagax or generate 7.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Lundin Mining vs. AB Sagax
Performance |
| Timeline |
| Lundin Mining |
| AB Sagax |
Lundin Mining and AB Sagax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and AB Sagax
The main advantage of trading using opposite Lundin Mining and AB Sagax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, AB Sagax 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 AB Sagax will offset losses from the drop in AB Sagax's long position.| Lundin Mining vs. Boliden AB | Lundin Mining vs. SSAB AB | Lundin Mining vs. AB SKF | Lundin Mining vs. Sandvik AB |
| AB Sagax vs. USWE Sports AB | AB Sagax vs. FormPipe Software AB | AB Sagax vs. SolTech Energy Sweden | AB Sagax vs. Nordic Asia Investment |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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