Correlation Between Redsense Medical and Lundin Mining
Can any of the company-specific risk be diversified away by investing in both Redsense Medical and Lundin Mining 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 Redsense Medical and Lundin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Redsense Medical AB and Lundin Mining, you can compare the effects of market volatilities on Redsense Medical and Lundin Mining 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 Redsense Medical with a short position of Lundin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Redsense Medical and Lundin Mining.
Diversification Opportunities for Redsense Medical and Lundin Mining
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Redsense and Lundin is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Redsense Medical AB and Lundin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Mining and Redsense Medical 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 Redsense Medical AB are associated (or correlated) with Lundin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lundin Mining has no effect on the direction of Redsense Medical i.e., Redsense Medical and Lundin Mining go up and down completely randomly.
Pair Corralation between Redsense Medical and Lundin Mining
Assuming the 90 days trading horizon Redsense Medical is expected to generate 1.86 times less return on investment than Lundin Mining. In addition to that, Redsense Medical is 1.96 times more volatile than Lundin Mining. It trades about 0.01 of its total potential returns per unit of risk. Lundin Mining is currently generating about 0.04 per unit of volatility. If you would invest 8,695 in Lundin Mining on August 29, 2024 and sell it today you would earn a total of 1,995 from holding Lundin Mining or generate 22.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.7% |
| Values | Daily Returns |
Redsense Medical AB vs. Lundin Mining
Performance |
| Timeline |
| Redsense Medical |
| Lundin Mining |
Redsense Medical and Lundin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Redsense Medical and Lundin Mining
The main advantage of trading using opposite Redsense Medical and Lundin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Redsense Medical position performs unexpectedly, Lundin Mining 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 Mining will offset losses from the drop in Lundin Mining's long position.| Redsense Medical vs. Mantex AB | Redsense Medical vs. Genovis AB | Redsense Medical vs. Vestum AB | Redsense Medical vs. Karolinska Development AB |
| Lundin Mining vs. Boliden AB | Lundin Mining vs. Lundin Gold | Lundin Mining vs. SSAB AB | Lundin Mining vs. AB SKF |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |