Correlation Between Northern Sphere and Lundin Energy
Can any of the company-specific risk be diversified away by investing in both Northern Sphere and Lundin Energy 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 Northern Sphere and Lundin Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northern Sphere Mining and Lundin Energy AB, you can compare the effects of market volatilities on Northern Sphere and Lundin Energy 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 Northern Sphere with a short position of Lundin Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Sphere and Lundin Energy.
Diversification Opportunities for Northern Sphere and Lundin Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Northern and Lundin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Northern Sphere Mining and Lundin Energy AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Energy AB and Northern Sphere 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 Northern Sphere Mining are associated (or correlated) with Lundin Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lundin Energy AB has no effect on the direction of Northern Sphere i.e., Northern Sphere and Lundin Energy go up and down completely randomly.
Pair Corralation between Northern Sphere and Lundin Energy
If you would invest 64.00 in Lundin Energy AB on March 4, 2024 and sell it today you would earn a total of 8.00 from holding Lundin Energy AB or generate 12.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Northern Sphere Mining vs. Lundin Energy AB
Performance |
Timeline |
Northern Sphere Mining |
Lundin Energy AB |
Northern Sphere and Lundin Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Northern Sphere and Lundin Energy
The main advantage of trading using opposite Northern Sphere and Lundin Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Sphere position performs unexpectedly, Lundin Energy 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 Energy will offset losses from the drop in Lundin Energy's long position.Northern Sphere vs. Volt Lithium Corp | Northern Sphere vs. HUMANA INC | Northern Sphere vs. Aquagold International | Northern Sphere vs. Barloworld Ltd ADR |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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