Correlation Between Lundin Mining and Panther Metals

Can any of the company-specific risk be diversified away by investing in both Lundin Mining and Panther Metals 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 Lundin Mining and Panther Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lundin Mining Corp and Panther Metals PLC, you can compare the effects of market volatilities on Lundin Mining and Panther Metals 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 Lundin Mining with a short position of Panther Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Panther Metals.

Diversification Opportunities for Lundin Mining and Panther Metals

-0.31

Correlation Coefficient

Lundin Mining  Panther Metals

Very good diversification

The 3 months correlation between Lundin and Panther is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and Panther Metals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panther Metals PLC and Lundin 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 Lundin Mining Corp are associated (or correlated) with Panther Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panther Metals PLC has no effect on the direction of Lundin Mining i.e., Lundin Mining and Panther Metals go up and down completely randomly.

Pair Corralation between Lundin Mining and Panther Metals

Assuming the 90 days trading horizon Lundin Mining Corp is expected to generate 0.6 times more return on investment than Panther Metals. However, Lundin Mining Corp is 1.68 times less risky than Panther Metals. It trades about 0.09 of its potential returns per unit of risk. Panther Metals PLC is currently generating about 0.03 per unit of risk. If you would invest  9,353  in Lundin Mining Corp on September 3, 2024 and sell it today you would earn a total of  1,402  from holding Lundin Mining Corp or generate 14.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Lundin Mining Corp  vs.  Panther Metals PLC

Lundin Mining Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lundin Mining Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Lundin Mining unveiled solid returns over the last few months and may actually be approaching a breakup point.

Panther Metals PLC

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Panther Metals PLC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Panther Metals may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Lundin Mining and Panther Metals

The main advantage of trading using opposite Lundin Mining and Panther Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, Panther Metals 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 Panther Metals will offset losses from the drop in Panther Metals' long position.

The idea behind Lundin Mining Corp and Panther Metals PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.