Correlation Between Western Copper and Astellas Pharma
Can any of the company-specific risk be diversified away by investing in both Western Copper and Astellas Pharma 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 Astellas Pharma 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 Astellas Pharma, you can compare the effects of market volatilities on Western Copper and Astellas Pharma 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 Astellas Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and Astellas Pharma.
Diversification Opportunities for Western Copper and Astellas Pharma
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Astellas is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and Astellas Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astellas Pharma 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 Astellas Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astellas Pharma has no effect on the direction of Western Copper i.e., Western Copper and Astellas Pharma go up and down completely randomly.
Pair Corralation between Western Copper and Astellas Pharma
Assuming the 90 days trading horizon Western Copper and is expected to generate 1.67 times more return on investment than Astellas Pharma. However, Western Copper is 1.67 times more volatile than Astellas Pharma. It trades about -0.02 of its potential returns per unit of risk. Astellas Pharma is currently generating about -0.04 per unit of risk. If you would invest 166.00 in Western Copper and on September 1, 2024 and sell it today you would lose (62.00) from holding Western Copper and or give up 37.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Western Copper and vs. Astellas Pharma
Performance |
| Timeline |
| Western Copper |
| Astellas Pharma |
Western Copper and Astellas Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Copper and Astellas Pharma
The main advantage of trading using opposite Western Copper and Astellas Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper position performs unexpectedly, Astellas Pharma 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 Astellas Pharma will offset losses from the drop in Astellas Pharma's long position.| Western Copper vs. BHP Group Limited | Western Copper vs. Rio Tinto Group | Western Copper vs. Rio Tinto Group | Western Copper vs. Vale SA |
| Astellas Pharma vs. GRIFFIN MINING LTD | Astellas Pharma vs. Zijin Mining Group | Astellas Pharma vs. Canon Marketing Japan | Astellas Pharma vs. Western Copper and |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Global Correlations Find global opportunities by holding instruments from different markets |