Correlation Between Western Copper and International Consolidated
Can any of the company-specific risk be diversified away by investing in both Western Copper and International Consolidated 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 International Consolidated 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 International Consolidated Airlines, you can compare the effects of market volatilities on Western Copper and International Consolidated 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 International Consolidated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and International Consolidated.
Diversification Opportunities for Western Copper and International Consolidated
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Western and International is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and International Consolidated Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Consolidated 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 International Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Consolidated has no effect on the direction of Western Copper i.e., Western Copper and International Consolidated go up and down completely randomly.
Pair Corralation between Western Copper and International Consolidated
Assuming the 90 days trading horizon Western Copper and is expected to under-perform the International Consolidated. In addition to that, Western Copper is 1.5 times more volatile than International Consolidated Airlines. It trades about -0.02 of its total potential returns per unit of risk. International Consolidated Airlines is currently generating about 0.1 per unit of volatility. If you would invest 143.00 in International Consolidated Airlines on September 13, 2024 and sell it today you would earn a total of 199.00 from holding International Consolidated Airlines or generate 139.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Copper and vs. International Consolidated Air
Performance |
| Timeline |
| Western Copper |
| International Consolidated |
Western Copper and International Consolidated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Copper and International Consolidated
The main advantage of trading using opposite Western Copper and International Consolidated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper position performs unexpectedly, International Consolidated 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 International Consolidated will offset losses from the drop in International Consolidated'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 |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |