Correlation Between Arbor Metals and Libero Copper
Can any of the company-specific risk be diversified away by investing in both Arbor Metals and Libero 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 Arbor Metals and Libero Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arbor Metals Corp and Libero Copper Corp, you can compare the effects of market volatilities on Arbor Metals and Libero 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 Arbor Metals with a short position of Libero Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arbor Metals and Libero Copper.
Diversification Opportunities for Arbor Metals and Libero Copper
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Arbor and Libero is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Arbor Metals Corp and Libero Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Libero Copper Corp and Arbor Metals 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 Arbor Metals Corp are associated (or correlated) with Libero Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Libero Copper Corp has no effect on the direction of Arbor Metals i.e., Arbor Metals and Libero Copper go up and down completely randomly.
Pair Corralation between Arbor Metals and Libero Copper
Assuming the 90 days horizon Arbor Metals Corp is expected to under-perform the Libero Copper. But the stock apears to be less risky and, when comparing its historical volatility, Arbor Metals Corp is 2.01 times less risky than Libero Copper. The stock trades about -0.09 of its potential returns per unit of risk. The Libero Copper Corp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 28.00 in Libero Copper Corp on August 25, 2024 and sell it today you would earn a total of 11.00 from holding Libero Copper Corp or generate 39.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Arbor Metals Corp vs. Libero Copper Corp
Performance |
| Timeline |
| Arbor Metals Corp |
| Libero Copper Corp |
Arbor Metals and Libero Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arbor Metals and Libero Copper
The main advantage of trading using opposite Arbor Metals and Libero Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arbor Metals position performs unexpectedly, Libero 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 Libero Copper will offset losses from the drop in Libero Copper's long position.| Arbor Metals vs. First Majestic Silver | Arbor Metals vs. Ivanhoe Energy | Arbor Metals vs. Orezone Gold Corp | Arbor Metals vs. Faraday Copper Corp |
| Libero Copper vs. Rogers Communications | Libero Copper vs. Computer Modelling Group | Libero Copper vs. Medical Facilities | Libero Copper vs. Champion Iron |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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