Correlation Between Lundin Gold and Insplorion

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

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

Diversification Opportunities for Lundin Gold and Insplorion

-0.78

Correlation Coefficient

Lundin Gold  Insplorion

Pay attention - limited upside

The 3 months correlation between Lundin and Insplorion is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Gold and Insplorion AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insplorion AB 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 Insplorion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insplorion AB has no effect on the direction of Lundin Gold i.e., Lundin Gold and Insplorion go up and down completely randomly.

Pair Corralation between Lundin Gold and Insplorion

Assuming the 90 days trading horizon Lundin Gold is expected to generate 0.58 times more return on investment than Insplorion. However, Lundin Gold is 1.72 times less risky than Insplorion. It trades about 0.11 of its potential returns per unit of risk. Insplorion AB is currently generating about -0.05 per unit of risk. If you would invest  38,540  in Lundin Gold on April 23, 2025 and sell it today you would earn a total of  7,540  from holding Lundin Gold or generate 19.56% 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.  Insplorion AB

Lundin Gold

Risk-Adjusted Performance

OK

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. In spite of comparatively uncertain technical and fundamental indicators, Lundin Gold unveiled solid returns over the last few months and may actually be approaching a breakup point.

Insplorion AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Insplorion AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Lundin Gold and Insplorion

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

The idea behind Lundin Gold and Insplorion AB 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.

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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.