Correlation Between Mountain Province and Lundin Gold
Can any of the company-specific risk be diversified away by investing in both Mountain Province 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 Mountain Province and Lundin Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mountain Province Diamonds and Lundin Gold, you can compare the effects of market volatilities on Mountain Province 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 Mountain Province with a short position of Lundin Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mountain Province and Lundin Gold.
Diversification Opportunities for Mountain Province and Lundin Gold
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mountain and Lundin is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Mountain Province Diamonds and Lundin Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Gold and Mountain Province 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 Mountain Province Diamonds 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 Mountain Province i.e., Mountain Province and Lundin Gold go up and down completely randomly.
Pair Corralation between Mountain Province and Lundin Gold
Assuming the 90 days trading horizon Mountain Province Diamonds is expected to under-perform the Lundin Gold. In addition to that, Mountain Province is 2.17 times more volatile than Lundin Gold. It trades about -0.04 of its total potential returns per unit of risk. Lundin Gold is currently generating about 0.09 per unit of volatility. If you would invest 1,333 in Lundin Gold on August 28, 2024 and sell it today you would earn a total of 1,845 from holding Lundin Gold or generate 138.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mountain Province Diamonds vs. Lundin Gold
Performance |
| Timeline |
| Mountain Province |
| Lundin Gold |
Mountain Province and Lundin Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mountain Province and Lundin Gold
The main advantage of trading using opposite Mountain Province and Lundin Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mountain Province 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.| Mountain Province vs. First Majestic Silver | Mountain Province vs. Ivanhoe Energy | Mountain Province vs. Orezone Gold Corp | Mountain Province vs. Faraday Copper 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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