Correlation Between Kaufman Et and Southern Copper
Can any of the company-specific risk be diversified away by investing in both Kaufman Et and Southern Copper 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 Kaufman Et and Southern Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaufman Et Broad and Southern Copper Corp, you can compare the effects of market volatilities on Kaufman Et and Southern Copper 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 Kaufman Et with a short position of Southern Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaufman Et and Southern Copper.
Diversification Opportunities for Kaufman Et and Southern Copper
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kaufman and Southern is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Kaufman Et Broad and Southern Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Copper Corp and Kaufman Et 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 Kaufman Et Broad are associated (or correlated) with Southern Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Copper Corp has no effect on the direction of Kaufman Et i.e., Kaufman Et and Southern Copper go up and down completely randomly.
Pair Corralation between Kaufman Et and Southern Copper
Assuming the 90 days trading horizon Kaufman Et is expected to generate 3.7 times less return on investment than Southern Copper. But when comparing it to its historical volatility, Kaufman Et Broad is 5.06 times less risky than Southern Copper. It trades about 0.07 of its potential returns per unit of risk. Southern Copper Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 6,605 in Southern Copper Corp on September 19, 2024 and sell it today you would earn a total of 3,051 from holding Southern Copper Corp or generate 46.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.66% |
| Values | Daily Returns |
Kaufman Et Broad vs. Southern Copper Corp
Performance |
| Timeline |
| Kaufman Et Broad |
| Southern Copper Corp |
Kaufman Et and Southern Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaufman Et and Southern Copper
The main advantage of trading using opposite Kaufman Et and Southern Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaufman Et position performs unexpectedly, Southern Copper 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 Southern Copper will offset losses from the drop in Southern Copper's long position.| Kaufman Et vs. Abingdon Health Plc | Kaufman Et vs. GlobalData PLC | Kaufman Et vs. CVS Health Corp | Kaufman Et vs. Universal Health Services |
| Southern Copper vs. Spirent Communications plc | Southern Copper vs. Universal Display Corp | Southern Copper vs. Gruppo MutuiOnline SpA | Southern Copper vs. Premier Foods PLC |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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