Correlation Between Lundin Mining and New Gold
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and New Gold 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 New Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lundin Mining and New Gold, you can compare the effects of market volatilities on Lundin Mining and New Gold 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 New Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and New Gold.
Diversification Opportunities for Lundin Mining and New Gold
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lundin and New is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining and New Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Gold 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 New Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Gold has no effect on the direction of Lundin Mining i.e., Lundin Mining and New Gold go up and down completely randomly.
Pair Corralation between Lundin Mining and New Gold
Assuming the 90 days trading horizon Lundin Mining is expected to generate 0.78 times more return on investment than New Gold. However, Lundin Mining is 1.28 times less risky than New Gold. It trades about 0.34 of its potential returns per unit of risk. New Gold is currently generating about 0.18 per unit of risk. If you would invest 1,507 in Lundin Mining on August 19, 2025 and sell it today you would earn a total of 1,059 from holding Lundin Mining or generate 70.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lundin Mining vs. New Gold
Performance |
| Timeline |
| Lundin Mining |
| New Gold |
Lundin Mining and New Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and New Gold
The main advantage of trading using opposite Lundin Mining and New Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, New Gold 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 New Gold will offset losses from the drop in New Gold's long position.| Lundin Mining vs. Ivanhoe Mines | Lundin Mining vs. Alamos Gold | Lundin Mining vs. First Quantum Minerals | Lundin Mining vs. Lundin Gold |
| New Gold vs. B2Gold Corp | New Gold vs. OceanaGold | New Gold vs. Artemis Gold | New Gold vs. Eldorado Gold Corp |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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