Correlation Between Lundin Gold and Meta Platforms
Can any of the company-specific risk be diversified away by investing in both Lundin Gold and Meta Platforms 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 Gold and Meta Platforms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lundin Gold and Meta Platforms, you can compare the effects of market volatilities on Lundin Gold and Meta Platforms 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 Gold with a short position of Meta Platforms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Gold and Meta Platforms.
Diversification Opportunities for Lundin Gold and Meta Platforms
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lundin and Meta is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Gold and Meta Platforms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Platforms and Lundin Gold 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 Gold are associated (or correlated) with Meta Platforms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Platforms has no effect on the direction of Lundin Gold i.e., Lundin Gold and Meta Platforms go up and down completely randomly.
Pair Corralation between Lundin Gold and Meta Platforms
If you would invest 1,726 in Lundin Gold on February 6, 2024 and sell it today you would earn a total of 118.00 from holding Lundin Gold or generate 6.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 0.4% |
Values | Daily Returns |
Lundin Gold vs. Meta Platforms
Performance |
Timeline |
Lundin Gold |
Meta Platforms |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lundin Gold and Meta Platforms Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lundin Gold and Meta Platforms
The main advantage of trading using opposite Lundin Gold and Meta Platforms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Gold position performs unexpectedly, Meta Platforms 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 Meta Platforms will offset losses from the drop in Meta Platforms' long position.Lundin Gold vs. Osisko Gold Ro | Lundin Gold vs. Dundee Precious Metals | Lundin Gold vs. SSR Mining | Lundin Gold vs. Sandstorm Gold Ltd |
Meta Platforms vs. Meta Platforms | Meta Platforms vs. Alphabet Inc Class A | Meta Platforms vs. Twilio Inc | Meta Platforms vs. Snap Inc |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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