Correlation Between Southern Copper and GreenX Metals
Can any of the company-specific risk be diversified away by investing in both Southern Copper and GreenX Metals 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 Southern Copper and GreenX Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern Copper Corp and GreenX Metals, you can compare the effects of market volatilities on Southern Copper and GreenX Metals 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 Southern Copper with a short position of GreenX Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Copper and GreenX Metals.
Diversification Opportunities for Southern Copper and GreenX Metals
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Southern and GreenX is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Southern Copper Corp and GreenX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenX Metals and Southern Copper 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 Southern Copper Corp are associated (or correlated) with GreenX Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenX Metals has no effect on the direction of Southern Copper i.e., Southern Copper and GreenX Metals go up and down completely randomly.
Pair Corralation between Southern Copper and GreenX Metals
Assuming the 90 days trading horizon Southern Copper Corp is expected to generate 2.31 times more return on investment than GreenX Metals. However, Southern Copper is 2.31 times more volatile than GreenX Metals. It trades about 0.04 of its potential returns per unit of risk. GreenX Metals is currently generating about 0.02 per unit of risk. If you would invest 5,536 in Southern Copper Corp on August 26, 2024 and sell it today you would earn a total of 4,476 from holding Southern Copper Corp or generate 80.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.4% |
| Values | Daily Returns |
Southern Copper Corp vs. GreenX Metals
Performance |
| Timeline |
| Southern Copper Corp |
| GreenX Metals |
Southern Copper and GreenX Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Copper and GreenX Metals
The main advantage of trading using opposite Southern Copper and GreenX Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Copper position performs unexpectedly, GreenX Metals 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 GreenX Metals will offset losses from the drop in GreenX Metals' long position.| Southern Copper vs. Zegona Communications Plc | Southern Copper vs. Verizon Communications | Southern Copper vs. Aeorema Communications Plc | Southern Copper vs. Team Internet Group |
| GreenX Metals vs. Spirent Communications plc | GreenX Metals vs. European Metals Holdings | GreenX Metals vs. Zoom Video Communications | GreenX Metals vs. Cornish Metals |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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