Correlation Between Lundin Gold and Keyence

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

By analyzing existing cross correlation between Lundin Gold and Keyence, you can compare the effects of market volatilities on Lundin Gold and Keyence 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 Keyence. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Gold and Keyence.

Diversification Opportunities for Lundin Gold and Keyence

-0.64

Correlation Coefficient

Lundin Gold  Keyence

Excellent diversification

The 3 months correlation between Lundin and Keyence is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Gold and Keyence in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keyence 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 Keyence. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keyence has no effect on the direction of Lundin Gold i.e., Lundin Gold and Keyence go up and down completely randomly.

Pair Corralation between Lundin Gold and Keyence

Assuming the 90 days trading horizon Lundin Gold is expected to generate 1.99 times more return on investment than Keyence. However, Lundin Gold is 1.99 times more volatile than Keyence. It trades about 0.06 of its potential returns per unit of risk. Keyence is currently generating about -0.1 per unit of risk. If you would invest  3,659  in Lundin Gold on April 22, 2025 and sell it today you would earn a total of  349.00  from holding Lundin Gold or generate 9.54% return on investment over 90 days.

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

Lundin Gold  vs.  Keyence

Lundin Gold

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lundin Gold are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Lundin Gold may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Keyence

Risk-Adjusted Performance

Very Weak

Over the last 90 days Keyence has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Lundin Gold and Keyence

The main advantage of trading using opposite Lundin Gold and Keyence positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Gold position performs unexpectedly, Keyence 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 Keyence will offset losses from the drop in Keyence's long position.

The idea behind Lundin Gold and Keyence 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.