Correlation Between MTI Investment and Lundin Mining

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

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

Diversification Opportunities for MTI Investment and Lundin Mining

-0.39

Correlation Coefficient

MTI Investment  Lundin Mining

Very good diversification

The 3 months correlation between MTI and Lundin is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding MTI Investment SE and Lundin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Mining and MTI Investment 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 MTI Investment SE 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 MTI Investment i.e., MTI Investment and Lundin Mining go up and down completely randomly.

Pair Corralation between MTI Investment and Lundin Mining

Assuming the 90 days trading horizon MTI Investment SE is expected to under-perform the Lundin Mining. But the stock apears to be less risky and, when comparing its historical volatility, MTI Investment SE is 1.02 times less risky than Lundin Mining. The stock trades about -0.2 of its potential returns per unit of risk. The Lundin Mining is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  9,358  in Lundin Mining on September 13, 2024 and sell it today you would earn a total of  942.00  from holding Lundin Mining or generate 10.07% return on investment over 90 days.

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

MTI Investment SE  vs.  Lundin Mining

MTI Investment SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MTI Investment SE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's forward 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.

Lundin Mining

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lundin Mining are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Lundin Mining may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with MTI Investment and Lundin Mining

The main advantage of trading using opposite MTI Investment and Lundin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MTI Investment 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.

The idea behind MTI Investment SE and Lundin Mining 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.