Correlation Between Adriatic Metals and Cascadero Copper
Can any of the company-specific risk be diversified away by investing in both Adriatic Metals and Cascadero 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 Adriatic Metals and Cascadero Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adriatic Metals PLC and Cascadero Copper, you can compare the effects of market volatilities on Adriatic Metals and Cascadero 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 Adriatic Metals with a short position of Cascadero Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adriatic Metals and Cascadero Copper.
Diversification Opportunities for Adriatic Metals and Cascadero Copper
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Adriatic and Cascadero is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Adriatic Metals PLC and Cascadero Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cascadero Copper and Adriatic 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 Adriatic Metals PLC are associated (or correlated) with Cascadero Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cascadero Copper has no effect on the direction of Adriatic Metals i.e., Adriatic Metals and Cascadero Copper go up and down completely randomly.
Pair Corralation between Adriatic Metals and Cascadero Copper
Assuming the 90 days horizon Adriatic Metals PLC is expected to under-perform the Cascadero Copper. But the pink sheet apears to be less risky and, when comparing its historical volatility, Adriatic Metals PLC is 40.24 times less risky than Cascadero Copper. The pink sheet trades about -0.19 of its potential returns per unit of risk. The Cascadero Copper is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1.20 in Cascadero Copper on September 4, 2024 and sell it today you would lose (0.41) from holding Cascadero Copper or give up 34.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Adriatic Metals PLC vs. Cascadero Copper
Performance |
| Timeline |
| Adriatic Metals PLC |
| Cascadero Copper |
Adriatic Metals and Cascadero Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adriatic Metals and Cascadero Copper
The main advantage of trading using opposite Adriatic Metals and Cascadero Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adriatic Metals position performs unexpectedly, Cascadero 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 Cascadero Copper will offset losses from the drop in Cascadero Copper's long position.| Adriatic Metals vs. Huntsman Exploration | Adriatic Metals vs. Aurelia Metals Limited | Adriatic Metals vs. American Helium | Adriatic Metals vs. Progressive Planet Solutions |
| Cascadero Copper vs. Qubec Nickel Corp | Cascadero Copper vs. IGO Limited | Cascadero Copper vs. Avarone Metals | Cascadero Copper vs. Adriatic Metals PLC |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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