Correlation Between Lundin Gold and Nippon Paint

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Can any of the company-specific risk be diversified away by investing in both Lundin Gold and Nippon Paint 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 Nippon Paint into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lundin Gold and Nippon Paint Holdings, you can compare the effects of market volatilities on Lundin Gold and Nippon Paint 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 Nippon Paint. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Gold and Nippon Paint.

Diversification Opportunities for Lundin Gold and Nippon Paint

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Lundin and Nippon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Gold and Nippon Paint Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nippon Paint Holdings 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 Nippon Paint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nippon Paint Holdings has no effect on the direction of Lundin Gold i.e., Lundin Gold and Nippon Paint go up and down completely randomly.

Pair Corralation between Lundin Gold and Nippon Paint

If you would invest  6,569  in Lundin Gold on October 7, 2025 and sell it today you would earn a total of  1,511  from holding Lundin Gold or generate 23.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Lundin Gold  vs.  Nippon Paint Holdings

 Performance 
       Timeline  
Lundin Gold 

Risk-Adjusted Performance

Fair

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Lundin Gold are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Lundin Gold reported solid returns over the last few months and may actually be approaching a breakup point.
Nippon Paint Holdings 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Nippon Paint Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Nippon Paint is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Lundin Gold and Nippon Paint Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lundin Gold and Nippon Paint

The main advantage of trading using opposite Lundin Gold and Nippon Paint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Gold position performs unexpectedly, Nippon Paint 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 Nippon Paint will offset losses from the drop in Nippon Paint's long position.
The idea behind Lundin Gold and Nippon Paint Holdings 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.
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.

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