Correlation Between Lundin Mining and Corline Biomedical

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

By analyzing existing cross correlation between Lundin Mining and Corline Biomedical AB, you can compare the effects of market volatilities on Lundin Mining and Corline Biomedical 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 Corline Biomedical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Corline Biomedical.

Diversification Opportunities for Lundin Mining and Corline Biomedical

-0.47

Correlation Coefficient

Lundin Mining  Corline Biomedical

Very good diversification

The 3 months correlation between Lundin and Corline is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining and Corline Biomedical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corline Biomedical 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 are associated (or correlated) with Corline Biomedical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corline Biomedical has no effect on the direction of Lundin Mining i.e., Lundin Mining and Corline Biomedical go up and down completely randomly.

Pair Corralation between Lundin Mining and Corline Biomedical

Assuming the 90 days trading horizon Lundin Mining is expected to generate 0.39 times more return on investment than Corline Biomedical. However, Lundin Mining is 2.55 times less risky than Corline Biomedical. It trades about 0.04 of its potential returns per unit of risk. Corline Biomedical AB is currently generating about -0.08 per unit of risk. If you would invest  10,520  in Lundin Mining on September 4, 2024 and sell it today you would earn a total of  150.00  from holding Lundin Mining or generate 1.43% return on investment over 90 days.

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

Lundin Mining  vs.  Corline Biomedical AB

Lundin Mining

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lundin Mining 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.

Corline Biomedical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Corline Biomedical AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Lundin Mining and Corline Biomedical

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

The idea behind Lundin Mining and Corline Biomedical AB 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.