Correlation Between Perficient and Lundin Mng

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

Diversification Opportunities for Perficient and Lundin Mng

0.28
  Correlation Coefficient

Modest diversification

The 3 months correlation between Perficient and Lundin is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Perficient and Lundin Mng Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Mng Corp and Perficient 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 Perficient are associated (or correlated) with Lundin Mng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lundin Mng Corp has no effect on the direction of Perficient i.e., Perficient and Lundin Mng go up and down completely randomly.

Pair Corralation between Perficient and Lundin Mng

Given the investment horizon of 90 days Perficient is expected to under-perform the Lundin Mng. But the stock apears to be less risky and, when comparing its historical volatility, Perficient is 1.24 times less risky than Lundin Mng. The stock trades about -0.08 of its potential returns per unit of risk. The Lundin Mng Corp is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  855.00  in Lundin Mng Corp on August 30, 2022 and sell it today you would lose (255.00)  from holding Lundin Mng Corp or give up 29.82% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy99.21%
ValuesDaily Returns

Perficient  vs.  Lundin Mng Corp

 Performance (%) 
       Timeline  
Perficient 
Perficient Performance
0 of 100
Over the last 90 days Perficient has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Perficient Price Channel

Lundin Mng Corp 
Lundin Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Lundin Mng Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak primary indicators, Lundin Mng exhibited solid returns over the last few months and may actually be approaching a breakup point.

Lundin Price Channel

Perficient and Lundin Mng Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Perficient and Lundin Mng

The main advantage of trading using opposite Perficient and Lundin Mng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perficient position performs unexpectedly, Lundin Mng 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 Lundin Mng will offset losses from the drop in Lundin Mng's long position.
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The idea behind Perficient and Lundin Mng Corp 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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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 Watchlist Optimization module to optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm.

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