Correlation Between Sirios Resources and Lundin Gold
Can any of the company-specific risk be diversified away by investing in both Sirios 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 Sirios 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 Sirios Resources and Lundin Gold, you can compare the effects of market volatilities on Sirios 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 Sirios Resources with a short position of Lundin Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sirios Resources and Lundin Gold.
Diversification Opportunities for Sirios Resources and Lundin Gold
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sirios and Lundin is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sirios Resources and Lundin Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Gold and Sirios 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 Sirios 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 Sirios Resources i.e., Sirios Resources and Lundin Gold go up and down completely randomly.
Pair Corralation between Sirios Resources and Lundin Gold
Assuming the 90 days horizon Sirios Resources is expected to generate 7.6 times more return on investment than Lundin Gold. However, Sirios Resources is 7.6 times more volatile than Lundin Gold. It trades about 0.07 of its potential returns per unit of risk. Lundin Gold is currently generating about 0.09 per unit of risk. If you would invest 1.30 in Sirios Resources on August 26, 2024 and sell it today you would earn a total of 2.68 from holding Sirios Resources or generate 206.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sirios Resources vs. Lundin Gold
Performance |
| Timeline |
| Sirios Resources |
| Lundin Gold |
Sirios Resources and Lundin Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sirios Resources and Lundin Gold
The main advantage of trading using opposite Sirios Resources and Lundin Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sirios 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.| Sirios Resources vs. Aurion Resources | Sirios Resources vs. Liberty Gold Corp | Sirios Resources vs. Orezone Gold Corp | Sirios Resources vs. Radisson Mining Resources |
| Lundin Gold vs. Sirios Resources | Lundin Gold vs. Q2 Metals Corp | Lundin Gold vs. Tectonic Metals | Lundin Gold vs. Angus Gold |
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 CEOs Directory module to screen CEOs from public companies around the world.
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