Correlation Between Intech Biopharm and First Copper
Can any of the company-specific risk be diversified away by investing in both Intech Biopharm and First Copper 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 Intech Biopharm and First Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intech Biopharm and First Copper Technology, you can compare the effects of market volatilities on Intech Biopharm and First Copper 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 Intech Biopharm with a short position of First Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intech Biopharm and First Copper.
Diversification Opportunities for Intech Biopharm and First Copper
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Intech and First is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Intech Biopharm and First Copper Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Copper Technology and Intech Biopharm 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 Intech Biopharm are associated (or correlated) with First Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Copper Technology has no effect on the direction of Intech Biopharm i.e., Intech Biopharm and First Copper go up and down completely randomly.
Pair Corralation between Intech Biopharm and First Copper
Assuming the 90 days trading horizon Intech Biopharm is expected to under-perform the First Copper. But the stock apears to be less risky and, when comparing its historical volatility, Intech Biopharm is 1.36 times less risky than First Copper. The stock trades about -0.41 of its potential returns per unit of risk. The First Copper Technology is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,655 in First Copper Technology on November 4, 2024 and sell it today you would earn a total of 75.00 from holding First Copper Technology or generate 2.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intech Biopharm vs. First Copper Technology
Performance |
| Timeline |
| Intech Biopharm |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| First Copper Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Intech Biopharm and First Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intech Biopharm and First Copper
The main advantage of trading using opposite Intech Biopharm and First Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intech Biopharm position performs unexpectedly, First Copper 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 First Copper will offset losses from the drop in First Copper's long position.The idea behind Intech Biopharm and First Copper Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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