Correlation Between Lundin Energy and GRUPO CARSO-A1
Can any of the company-specific risk be diversified away by investing in both Lundin Energy and GRUPO CARSO-A1 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 GRUPO CARSO-A1 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 GRUPO CARSO A1, you can compare the effects of market volatilities on Lundin Energy and GRUPO CARSO-A1 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 GRUPO CARSO-A1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Energy and GRUPO CARSO-A1.
Diversification Opportunities for Lundin Energy and GRUPO CARSO-A1
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lundin and GRUPO is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Energy AB and GRUPO CARSO A1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRUPO CARSO A1 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 GRUPO CARSO-A1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRUPO CARSO A1 has no effect on the direction of Lundin Energy i.e., Lundin Energy and GRUPO CARSO-A1 go up and down completely randomly.
Pair Corralation between Lundin Energy and GRUPO CARSO-A1
Assuming the 90 days horizon Lundin Energy is expected to generate 1.57 times less return on investment than GRUPO CARSO-A1. But when comparing it to its historical volatility, Lundin Energy AB is 1.17 times less risky than GRUPO CARSO-A1. It trades about 0.01 of its potential returns per unit of risk. GRUPO CARSO A1 is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 609.00 in GRUPO CARSO A1 on September 2, 2024 and sell it today you would lose (44.00) from holding GRUPO CARSO A1 or give up 7.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lundin Energy AB vs. GRUPO CARSO A1
Performance |
| Timeline |
| Lundin Energy AB |
| GRUPO CARSO A1 |
Lundin Energy and GRUPO CARSO-A1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Energy and GRUPO CARSO-A1
The main advantage of trading using opposite Lundin Energy and GRUPO CARSO-A1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Energy position performs unexpectedly, GRUPO CARSO-A1 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 GRUPO CARSO-A1 will offset losses from the drop in GRUPO CARSO-A1's long position.| Lundin Energy vs. Iridium Communications | Lundin Energy vs. Spirent Communications plc | Lundin Energy vs. MTI WIRELESS EDGE | Lundin Energy vs. Salesforce |
| GRUPO CARSO-A1 vs. SIVERS SEMICONDUCTORS AB | GRUPO CARSO-A1 vs. Darden Restaurants | GRUPO CARSO-A1 vs. Reliance Steel Aluminum | GRUPO CARSO-A1 vs. Q2M Managementberatung AG |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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