Correlation Between Western Copper and Churchill Downs
Can any of the company-specific risk be diversified away by investing in both Western Copper and Churchill Downs 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 Western Copper and Churchill Downs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Copper and and Churchill Downs Incorporated, you can compare the effects of market volatilities on Western Copper and Churchill Downs 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 Western Copper with a short position of Churchill Downs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and Churchill Downs.
Diversification Opportunities for Western Copper and Churchill Downs
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Churchill is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and Churchill Downs Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Churchill Downs and Western 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 Western Copper and are associated (or correlated) with Churchill Downs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Churchill Downs has no effect on the direction of Western Copper i.e., Western Copper and Churchill Downs go up and down completely randomly.
Pair Corralation between Western Copper and Churchill Downs
Assuming the 90 days trading horizon Western Copper and is expected to under-perform the Churchill Downs. In addition to that, Western Copper is 1.73 times more volatile than Churchill Downs Incorporated. It trades about -0.02 of its total potential returns per unit of risk. Churchill Downs Incorporated is currently generating about 0.04 per unit of volatility. If you would invest 9,684 in Churchill Downs Incorporated on September 14, 2024 and sell it today you would earn a total of 3,416 from holding Churchill Downs Incorporated or generate 35.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Western Copper and vs. Churchill Downs Incorporated
Performance |
| Timeline |
| Western Copper |
| Churchill Downs |
Western Copper and Churchill Downs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Copper and Churchill Downs
The main advantage of trading using opposite Western Copper and Churchill Downs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper position performs unexpectedly, Churchill Downs 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 Churchill Downs will offset losses from the drop in Churchill Downs' long position.| Western Copper vs. BHP Group Limited | Western Copper vs. Vale SA | Western Copper vs. Superior Plus Corp | Western Copper vs. SIVERS SEMICONDUCTORS AB |
| Churchill Downs vs. Western Copper and | Churchill Downs vs. National Beverage Corp | Churchill Downs vs. Cal Maine Foods | Churchill Downs vs. COFCO Joycome Foods |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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