Correlation Between Lundin Mining and Antofagasta PLC
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and Antofagasta PLC 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 Antofagasta PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lundin Mining and Antofagasta PLC, you can compare the effects of market volatilities on Lundin Mining and Antofagasta PLC 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 Antofagasta PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Antofagasta PLC.
Diversification Opportunities for Lundin Mining and Antofagasta PLC
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lundin and Antofagasta is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining and Antofagasta PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antofagasta PLC 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 Antofagasta PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antofagasta PLC has no effect on the direction of Lundin Mining i.e., Lundin Mining and Antofagasta PLC go up and down completely randomly.
Pair Corralation between Lundin Mining and Antofagasta PLC
Assuming the 90 days horizon Lundin Mining is expected to generate 0.8 times more return on investment than Antofagasta PLC. However, Lundin Mining is 1.26 times less risky than Antofagasta PLC. It trades about 0.15 of its potential returns per unit of risk. Antofagasta PLC is currently generating about 0.03 per unit of risk. If you would invest 614.00 in Lundin Mining on August 29, 2024 and sell it today you would earn a total of 98.00 from holding Lundin Mining or generate 15.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 10.24% |
| Values | Daily Returns |
Lundin Mining vs. Antofagasta PLC
Performance |
| Timeline |
| Lundin Mining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Antofagasta PLC |
Lundin Mining and Antofagasta PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and Antofagasta PLC
The main advantage of trading using opposite Lundin Mining and Antofagasta PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, Antofagasta PLC 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 Antofagasta PLC will offset losses from the drop in Antofagasta PLC's long position.| Lundin Mining vs. Capstone Copper Corp | Lundin Mining vs. Hudbay Minerals | Lundin Mining vs. Copper Mountain Mining | Lundin Mining vs. Taseko Mines |
| Antofagasta PLC vs. Bell Copper | Antofagasta PLC vs. Arizona Sonoran Copper | Antofagasta PLC vs. Dor Copper Mining | Antofagasta PLC vs. CopperCorp Resources |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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