Correlation Between Lundin Energy and CIG PANNONIA
Can any of the company-specific risk be diversified away by investing in both Lundin Energy and CIG PANNONIA 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 Energy and CIG PANNONIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lundin Energy AB and CIG PANNONIA LIFE, you can compare the effects of market volatilities on Lundin Energy and CIG PANNONIA 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 Energy with a short position of CIG PANNONIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Energy and CIG PANNONIA.
Diversification Opportunities for Lundin Energy and CIG PANNONIA
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lundin and CIG is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Energy AB and CIG PANNONIA LIFE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIG PANNONIA LIFE and Lundin Energy 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 Energy AB are associated (or correlated) with CIG PANNONIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIG PANNONIA LIFE has no effect on the direction of Lundin Energy i.e., Lundin Energy and CIG PANNONIA go up and down completely randomly.
Pair Corralation between Lundin Energy and CIG PANNONIA
Assuming the 90 days horizon Lundin Energy AB is expected to generate 1.89 times more return on investment than CIG PANNONIA. However, Lundin Energy is 1.89 times more volatile than CIG PANNONIA LIFE. It trades about 0.27 of its potential returns per unit of risk. CIG PANNONIA LIFE is currently generating about 0.01 per unit of risk. If you would invest 57.00 in Lundin Energy AB on October 9, 2024 and sell it today you would earn a total of 8.00 from holding Lundin Energy AB or generate 14.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lundin Energy AB vs. CIG PANNONIA LIFE
Performance |
| Timeline |
| Lundin Energy AB |
| CIG PANNONIA LIFE |
Lundin Energy and CIG PANNONIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Energy and CIG PANNONIA
The main advantage of trading using opposite Lundin Energy and CIG PANNONIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Energy position performs unexpectedly, CIG PANNONIA 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 CIG PANNONIA will offset losses from the drop in CIG PANNONIA's long position.| Lundin Energy vs. Costco Wholesale Corp | Lundin Energy vs. COLUMBIA SPORTSWEAR | Lundin Energy vs. BURLINGTON STORES | Lundin Energy vs. Geely Automobile Holdings |
| CIG PANNONIA vs. PLAYSTUDIOS A DL 0001 | CIG PANNONIA vs. Playmates Toys Limited | CIG PANNONIA vs. Cass Information Systems | CIG PANNONIA vs. ScanSource |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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