Correlation Between Mandalay Resources and Lundin Gold
Can any of the company-specific risk be diversified away by investing in both Mandalay Resources and Lundin Gold 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 Mandalay Resources and Lundin Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mandalay Resources Corp and Lundin Gold, you can compare the effects of market volatilities on Mandalay Resources and Lundin Gold 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 Mandalay Resources with a short position of Lundin Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mandalay Resources and Lundin Gold.
Diversification Opportunities for Mandalay Resources and Lundin Gold
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mandalay and Lundin is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Mandalay Resources Corp and Lundin Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Gold and Mandalay Resources 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 Mandalay Resources Corp are associated (or correlated) with Lundin Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lundin Gold has no effect on the direction of Mandalay Resources i.e., Mandalay Resources and Lundin Gold go up and down completely randomly.
Pair Corralation between Mandalay Resources and Lundin Gold
Assuming the 90 days trading horizon Mandalay Resources is expected to generate 1.04 times less return on investment than Lundin Gold. In addition to that, Mandalay Resources is 1.1 times more volatile than Lundin Gold. It trades about 0.15 of its total potential returns per unit of risk. Lundin Gold is currently generating about 0.17 per unit of volatility. If you would invest 1,992 in Lundin Gold on August 28, 2024 and sell it today you would earn a total of 1,186 from holding Lundin Gold or generate 59.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mandalay Resources Corp vs. Lundin Gold
Performance |
| Timeline |
| Mandalay Resources Corp |
| Lundin Gold |
Mandalay Resources and Lundin Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mandalay Resources and Lundin Gold
The main advantage of trading using opposite Mandalay Resources and Lundin Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mandalay Resources position performs unexpectedly, Lundin Gold 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 Lundin Gold will offset losses from the drop in Lundin Gold's long position.| Mandalay Resources vs. North Arrow Minerals | Mandalay Resources vs. International Tower Hill | Mandalay Resources vs. Jade Leader Corp | Mandalay Resources vs. Morien Resources Corp |
| Lundin Gold vs. Osisko Gold Ro | Lundin Gold vs. Dundee Precious Metals | Lundin Gold vs. SSR Mining | Lundin Gold vs. Sandstorm Gold Ltd |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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