Correlation Between American Copper and Eastern Platinum
Can any of the company-specific risk be diversified away by investing in both American Copper and Eastern Platinum 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 American Copper and Eastern Platinum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Copper Development and Eastern Platinum Limited, you can compare the effects of market volatilities on American Copper and Eastern Platinum 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 American Copper with a short position of Eastern Platinum. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Copper and Eastern Platinum.
Diversification Opportunities for American Copper and Eastern Platinum
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between American and Eastern is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding American Copper Development and Eastern Platinum Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Platinum and American 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 American Copper Development are associated (or correlated) with Eastern Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Platinum has no effect on the direction of American Copper i.e., American Copper and Eastern Platinum go up and down completely randomly.
Pair Corralation between American Copper and Eastern Platinum
Assuming the 90 days horizon American Copper Development is expected to generate 3.09 times more return on investment than Eastern Platinum. However, American Copper is 3.09 times more volatile than Eastern Platinum Limited. It trades about 0.06 of its potential returns per unit of risk. Eastern Platinum Limited is currently generating about 0.0 per unit of risk. If you would invest 4.20 in American Copper Development on November 3, 2024 and sell it today you would lose (1.80) from holding American Copper Development or give up 42.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.64% |
| Values | Daily Returns |
American Copper Development vs. Eastern Platinum Limited
Performance |
| Timeline |
| American Copper Deve |
| Eastern Platinum |
American Copper and Eastern Platinum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Copper and Eastern Platinum
The main advantage of trading using opposite American Copper and Eastern Platinum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Copper position performs unexpectedly, Eastern Platinum 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 Eastern Platinum will offset losses from the drop in Eastern Platinum's long position.| American Copper vs. Marine Products | American Copper vs. ANTA Sports Products | American Copper vs. SunOpta | American Copper vs. Cardinal Health |
| Eastern Platinum vs. Thunder Mountain Gold | Eastern Platinum vs. Chesapeake Gold Corp | Eastern Platinum vs. AbraSilver Resource Corp | Eastern Platinum vs. GoGold Resources |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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