Correlation Between Radisson Mining and Lundin Gold
Can any of the company-specific risk be diversified away by investing in both Radisson Mining 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 Radisson Mining and Lundin Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Radisson Mining Resources and Lundin Gold, you can compare the effects of market volatilities on Radisson Mining 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 Radisson Mining with a short position of Lundin Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Radisson Mining and Lundin Gold.
Diversification Opportunities for Radisson Mining and Lundin Gold
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Radisson and Lundin is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Radisson Mining Resources and Lundin Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Gold and Radisson Mining 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 Radisson Mining Resources 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 Radisson Mining i.e., Radisson Mining and Lundin Gold go up and down completely randomly.
Pair Corralation between Radisson Mining and Lundin Gold
Assuming the 90 days horizon Radisson Mining Resources is expected to under-perform the Lundin Gold. In addition to that, Radisson Mining is 2.08 times more volatile than Lundin Gold. It trades about -0.16 of its total potential returns per unit of risk. Lundin Gold is currently generating about -0.08 per unit of volatility. If you would invest 2,462 in Lundin Gold on August 26, 2024 and sell it today you would lose (121.00) from holding Lundin Gold or give up 4.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Radisson Mining Resources vs. Lundin Gold
Performance |
| Timeline |
| Radisson Mining Resources |
| Lundin Gold |
Radisson Mining and Lundin Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Radisson Mining and Lundin Gold
The main advantage of trading using opposite Radisson Mining and Lundin Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Radisson Mining 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.| Radisson Mining vs. American Pacific Mining | Radisson Mining vs. Arizona Metals Corp | Radisson Mining vs. Roscan Gold Corp | Radisson Mining vs. Big Ridge Gold |
| Lundin Gold vs. Aurion Resources | Lundin Gold vs. Liberty Gold Corp | Lundin Gold vs. Orezone Gold Corp | Lundin Gold vs. Radisson Mining Resources |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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