Correlation Between Western Copper and EVN AG
Can any of the company-specific risk be diversified away by investing in both Western Copper and EVN AG 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 EVN AG 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 EVN AG, you can compare the effects of market volatilities on Western Copper and EVN AG 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 EVN AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and EVN AG.
Diversification Opportunities for Western Copper and EVN AG
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Western and EVN is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and EVN AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EVN AG 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 EVN AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EVN AG has no effect on the direction of Western Copper i.e., Western Copper and EVN AG go up and down completely randomly.
Pair Corralation between Western Copper and EVN AG
Assuming the 90 days trading horizon Western Copper and is expected to generate 2.7 times more return on investment than EVN AG. However, Western Copper is 2.7 times more volatile than EVN AG. It trades about 0.01 of its potential returns per unit of risk. EVN AG is currently generating about -0.08 per unit of risk. If you would invest 104.00 in Western Copper and on September 14, 2024 and sell it today you would lose (1.00) from holding Western Copper and or give up 0.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Copper and vs. EVN AG
Performance |
| Timeline |
| Western Copper |
| EVN AG |
Western Copper and EVN AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Copper and EVN AG
The main advantage of trading using opposite Western Copper and EVN AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper position performs unexpectedly, EVN AG 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 EVN AG will offset losses from the drop in EVN AG's 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 |
| EVN AG vs. SHIP HEALTHCARE HLDGINC | EVN AG vs. CARSALESCOM | EVN AG vs. Canon Marketing Japan | EVN AG vs. EPSILON HEALTHCARE LTD |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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